Outsourcing it Positions to Low Cost Countries

BACKGROUND:
Off shoring - the transfer of high wage U.S. jobs to lower cost overseas locations especially in Banking Industry is enabled by improved communications technologies and driven by the desire of corporations to establish a business presence in potentially lucrative foreign markets as well as to take advantage of the lower costs of production and skilled labor in those markets. Forrester Research has projected that as many as 3.3 million white-collar jobs of all kinds and over $136 billion in wages will be moved from the United States to lower cost, offshore locations by 2015. Although the initial emphasis has been on routine service and technical support positions, the trend is expanding to include more complex engineering and design services. It is abundantly clear that many of the jobs being sent offshore were formerly held by U.S. engineers, computer scientists and other information technology professionals.

The off shoring trend is particularly unsettling for American high-tech workers. The economy lost 3 million manufacturing jobs in the past decade. American high-tech firms shed 560,000 jobs between 2001 and 2003, and expect to lose another 234,000 in 2004. The Commerce Department reports that the number of U.S. IT workers employed in all industries has declined by 8 percent since 2000. Although initially concentrated in the manufacturing sector and in low-skilled jobs, the Commerce Department says that "recent job losses have been widespread across most IT-goods and services producing industries, and across all IT skill levels." Some jobs are expected to return with a stronger economy, but the majority is probably gone for good. Offshore outsourcing will further compound that shrinkage.