Headcount: Offshoring, Dude!

Headcount is intrigued by strong hints that outsourcing -- or "offshoring," as the kids call it -- is more than just a temporary blip.

Case in point:
  • Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) is outsourcing its international product manufacturing to Elcoteq Network Corp., a move that affects 300 jobs.

  • At least 1,000 jobs are being affected by Sprint Corp.'s (NYSE: FON) decision to move some applications development overseas, according to a report in the Kansas City Star. The outsourcing deals are old news, but now there's an inkling of how many jobs are cut (see Sprint Springs Outsourcing Deals).

  • AT&T Wireless Services Inc. (NYSE: AWE) is making plans to lay off more than 10 percent of its 30,000 workers over the next year as it farms out jobs overseas, according to a Wall Street Journal report.

  • Infosys Technologies Ltd., an outsourcing beneficiary based in India, is worth $1 billion more than its U.S. competitor Electronic Data Systems Corp. (EDS), even though EDS has about 121,000 more employees and more than 20 times the revenues.

  • Would it be wrong to bring up the Montreal Expos here? Why does a Canadian team play "America's pastime" so close to the equator for so much of the year?

Okay, Headcount will cease the outsourcing observations for now. Better yet, we'll hire a room full of wise-cracking columnists in Beijing to handle next week's column duties. And we're not giving them bathroom breaks, either. Until then, there are plenty of hirings and firings to ponder this week:

  • Maryland-based Sentito Networks is in the hunt for a VP of product marketing, according to sources close to the company. A job description handed to candidates reveals some interesting bits about the 85-person voice switch vendor. Privately held Sentito tells candidates it has landed 15 customers and trials with three RBOCs since releasing its product four months ago. Its revenues this year are projected to reach $3 million, climbing to between $80 million and $100 million in 2005, sources say.

  • Riverstone Networks Inc. (Nasdaq: RSTN) says Peter McGann, its executive VP of sales, has left the company after his job was made redundant. Regional VPs who once reported to McGann now report directly to Riverstone president and chief executive officer Oscar Rodriguez. Suresh Gopalakrishnan, formerly the executive VP of engineering, has also left the company this year, according Riverstone's filings with the Securities and Exchange Commission (SEC).

  • Components vendor Onetta Inc. confirms that its CEO, Orlando Reyes, has left the company. Until a replacement is found, his duties will be handled by founder and CTO Yan Sun and finance VP Allen R. Morton. Reyes took over for former CEO Dennis Barsema in January, according to Onetta founder and VP of product management Robert Macdonald (see Barsema to Leave Onetta).
  • Photuris Inc. has furloughed a number of its staff, putting them on unpaid leave while they retain employee status, chief operating officer Bill Gartner says. The metro WDM company has made sales to Verizon Communications Inc. (NYSE: VZ) and is in trials with two other RBOCs and an IXC. It has completed the third release of its product but has to make a tradeoff between future product development and conserving cash, Gartner says.
  • Sprint's annual Thanksgiving Day charity run begins at the company's Overland Park, Kan., headquarters at 9 a.m. on Nov. 27. The run is open to the public, and the first 3,700 entrants get a commemorative T-shirt. But if you send some funny or embarrassing photos from the event to [email protected] –- photos so good that we publish them -- we'll send give you a Light Reading T-shirt to add to your collection.

    And now here's a rundown of some other notable appointments (and disappointments) from the past few days: That's all for this edition of Headcount. We may be able to get in one more column before Headcount goes offshoring for the Thanksgiving holidays, so don't be shy about sending your tips to [email protected]. Gobble. Grobal.

    — Phil Harvey, Senior Editor, Light Reading

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    gardner 12/5/2012 | 2:47:09 AM
    re: Headcount: Offshoring, Dude!
    First, giving tax incentives to the companies that don't do outsourcing certainly would help to keep jobs here. But we as tax payers will have to pay to have their product competitive (in price). That will be a lot to pay.

    I don't buy the "too expensive" argument. We always seem to have enough money (100s of billions of dollars before it is over) to start foolish wars that don't address our real problems but never enough to help people in our own country do well. This is totally unacceptable but seems to play well with a lot of very easy to fool people. Our current administration doesn't care a bit about jobs but it feels it can overcome this shortcoming by wrapping itself in the flag and confusing silly people about who is the most dangerous terrorist (Saddam or bin Ladin).

    Second, I don't know how import taxes or tariffs would prevent companies from using foreign cheap labor.

    Why can't that labor be taxed based on its location?
    gardner 12/5/2012 | 2:47:08 AM
    re: Headcount: Offshoring, Dude!
    What a loser. We all always have a choice. Just because we don't like the choice, it doesn't invalidate the choice we make.

    Yeah, cute. You have a choice: "Do you want your left eye gouged out with a rusty fork or your right eye?".

    Why don't you Randroids find another place to play?

    Go for a walk. Let the thread die.

    Not a chance Randroid.

    technonerd 12/5/2012 | 2:47:08 AM
    re: Headcount: Offshoring, Dude! This argument in favor of CEOs would be more credible if we heard them complain about offshoring but they heartily endorse it.
    I have known a lot of CEOs and listened to many of them talk. Never once have I heard a CEO speak with pride about how well-paid his workers are. Labor costs are always treated as a burden.
    basic2 12/5/2012 | 2:47:07 AM
    re: Headcount: Offshoring, Dude! A CEO is an employee like rest of us get paid by salary, bonus and some options. He works for the board and reports to the board. If he doesn't do what the board tell him to do, he will be fired. So should the blame go beyond CEOs?
    technonerd 12/5/2012 | 2:46:58 AM
    re: Headcount: Offshoring, Dude! A CEO is an employee like rest of us get paid by salary, bonus and some options. He works for the board and reports to the board. If he doesn't do what the board tell him to do, he will be fired.
    Boo effin' hoo.
    whyiswhy 12/5/2012 | 2:46:57 AM
    re: Headcount: Offshoring, Dude! Volkot, you wrote:

    "So there is a clear conflict between three interest groups:
    (a) domestic workers
    (b) business interests (via product quality/cost)
    (c) national interests"
    ... (edited)...
    You and many others tend to think that (a) and (c) are the same."

    Where in the hell did you get that? If you have been listening, I have made the case in multiple ways that (a) and (c) are not aligned, although they should be. In fact, they are 180 degrees out of alignment. I have argued that (a) and (b) are aligned due to widespread government corruption.

    whyiswhy 12/5/2012 | 2:46:55 AM
    re: Headcount: Offshoring, Dude! You said:

    "Strange as it may seem, but undocumented workers are also quite economically active as they help to fill many unpopular and low-paid job slots which would otherwise stay vacant."

    This is illogical, and flies in the face of the supply demand equation. In fact, without un-documented workers employers would have to pay what it took to get someone to do the job, or go out of business. I guarantee they would raise salaries, rather than go out of business. And I guarantee that if they rasied the salaries, they would have more than enough legal domestic workers to fill the need.

    whyiswhy 12/5/2012 | 2:46:54 AM
    re: Headcount: Offshoring, Dude! Basic2, you said:

    "Probably a CEO has no choice in this matter too. In current situation, unless something seriously changed, without outsourcing, how can a company compete with other companies who do outsourcing, their products or services will be much cheaper."

    Valid point. Which is why the tarriff has to be applied at the federal level, so it affects all domestic companies equally. This might have the effect of making it tough overall for the industry -as a whole- to compete against foreign versions of their game.

    Short term issues can be handled by tarriffs, and longer term by exchange rates.

    As to exchange rate theory: exchange rates hould be set so the average cost of living for an individual and his/her family is roughly equal no matter what country they are living in.

    startup_shutup 12/5/2012 | 2:46:47 AM
    re: Headcount: Offshoring, Dude! I am in agreement with whyiswhy. Giving all kinds
    of status to undocumented workers serves selfish
    business interests. I am really surprised that
    people are supporting undocumented workers.
    Similarly all these quota increase of H1 is
    also for selfish business interests. As I said
    before do offshoring if you can but please do
    not do inshoring (H1, undocumented etc). This
    is plain corrupted policy serving vested
    interests. BobbyMax is right more times than
    BobbyMax 12/5/2012 | 2:46:43 AM
    re: Headcount: Offshoring, Dude! I have been watching with a great deal of helplessness and frustration because of pilferage of technology by India and China. These two countries have not contributed anything to the computer technology but have been the largest beneficiary of work done by the US researchers and scientists. I have never seen so much of transfer of technology to India avd China by Intel, Sun, H-P. Lucent, Motorola, Oracle, Cisco, Adobe, Bank of America, and hundreds of other companies big and small. Noone is minding the store while this is happening.

    I do not know of any other country in the world that has appropriated so much technology from the US than India and China. The companies mentioned and many other countries have disabled the future of our country.

    Who introduced the concept of H1B visa? The answer is small minded CEOs who wanted to fill up their pocket without considering the future of our country. Who created the family sponsorshi programs? The answer is US congress with the support of campign contributions from CEOs and other wealthy individuals who do not care about the fellow americans. These people have the most criminal mind. I have been able to understand why Jack Welch of GE who was riding very high until unlawful payments came to light. TYhe US Government has not allowed any criminal law to evolve against the wealthy people in our country.

    Many companies such as Intel, H-P and Sun were employing foreign workers while denying employment to the US citizens. To my painful amazement, these corrupt CEOs had aaw passed passed by the US Congress that makes it perfectly legal to hire foreign workers over the US workers. Can you think of worst human creatures than the CEOs who indulge in this kind of henious acts.

    To the best of my knowledge no other country has treated their own citizens like this, not even Sadaam Husain of Iraq."Dr" Bush demonizes Mr. Husain but he is unable to look into his own face.
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