Washington, Dec. 15 (PTI): International Business Machines Corp. (IBM) is planning to move some 4,730 jobs of software programmers to India and China among others, in one of the biggest moves to “offshore” highly paid US software jobs.
IBM has told its managers to plan on moving the work of as many as 4,730 programmers to India, China and elsewhere, the Wall Street Journal reported today quoting company documents.
A former IBM executive in India, Pawan Kumar, now chairman of Moksha Technologies Plc, an outsourcing firm, says that IBM has 9,000 people in India and plans to increase that to 20,000 by the end of 2005.
The unannounced plan, said the Journal, would replace thousands of workers in several facilities in the US, the managers have been told.
IBM has hired 500 engineers in India to take on some of the work that will be moved. The plan, still under development, will take place over a number of months in stages. About 947 people are scheduled to be notified during the first half of the coming year that their work will be handled overseas in the future. IBM said most of the growth in developing countries “will result from winning new contracts” and that US hiring next year will equal or exceed 2003 levels.
However, the Journal described the “trend” as “the most serious long-term threats to US employment.
Unlike low-wage manufacturing, the Journal pointed out, the US computer services jobs to be moved overseas by IBM typically pay $ 75,000 to $ 100,000 or more a year. In contrast, hiring a software engineer with a bachelors or even a masters degree from a top technical university in India may cost up to $ 10,000 to $ 20,000 annually.