More High-Tech Offshoring

Today's Wall Street Journal has an article on Big Blue, IBM, and offshoring. While the article does give numbers; 3,000 jobs will be moved to China, Brazil and India, it also deals with some internal documents that give a glimpse into how the company is trying to position these moves.

The IBM documents show that the company is acutely aware of the sensitivities involved. One memo, which advises managers how to communicate the news to affected employees, says among other things: "Do not be transparent regarding the purpose/intent" and cautions that the "Terms 'On-shore' and 'Off-shore' should never be used." The memo also suggests that anything written to employees should first be "sanitized" by human-resources and communications staffers.

Notice the phrases above I've bolded: if you clear away the business speak what it says is that employees being fired because their jobs are being moved offshore should suffer one additional indignity: they should be lied to. "Do not be transparent," don't, for heaven's sake tell them why they are really being fired. "Sanitized," don't give them any clue why we are screwing them over and especially don't give them any legal recourse.

So what could convince IBM that decreasing the number of people in this country with jobs or who have a good opinion of IBM is a good thing? The article lays out some very interesting numbers:

Besides the low-level programmers billing at $12.50 an hour, the chart shows that a Chinese senior analyst or application-development manager with more than five years experience would be billed at $18 an hour. The person familiar with IBM's operations said that person would be equivalent to a U.S. "Band 7" employee billed at about $66 an hour. And a Chinese project manager with seven years experience would be billed at $24 an hour, equivalent to a U.S. "Band 8" billed at about $81 hourly.

Those are very interesting numbers and even if they somewhat overstate the actual savings most companies see by offshoring they are hard to ignore. And yet they understate what would be lost besides American jobs. They completely ignore the way that companies are continuing to "recover" from the recession at the expense of their employees. Employees - or ex-employees - who will no longer be able to buy IBM products. Ex-employees who will be forced into lower paying jobs, forced to shop at Wal-Mart. All of which forces the economy into a jobless spiral and continues to push average wages lower and lower.

In a final bit of ignominy and vast understatement, IBM's managers are given a script for how to handle these firings.

In the draft script prepared for managers, IBM suggests the workers be told: "This action is a statement about the rate and pace of change in this demanding industry. ... It is in no way a comment on the excellent work you have done over the years." The script also suggests saying: "For the people whose jobs are affected by this consolidation, I understand this is difficult news."