Rising Global Demand for Offshoring Drives Tata Profits

<p>Basically, TATA Consultancy Services profits skyrocket as US companies continue layoffs. And it's not just Tata. Infosys, and Wipro are also enjoying the wealth from Western corporations. Most of these new jobs created at TATA and Infosys reflect either layoffs or non-hires in the United States... in any case, 50% of the business is from the US. So the money we spend as American companies goes to hire TATA workers and pay shareholders. Offshoring spending continues to rise despite the rise of the rupee.</p>

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The company added 19,293 employees during the quarter -- a net of 10,717 people -- its highest ever and raised its gross hiring target for the year ending March to 50,000.

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<p>Can you think of any US companies that have posted these kind of job growth in the United States? Google, Microsoft, Intel, HP, Boeing, IBM, General Electric, Facebook, EMC, General Dynamics, Raytheon, Proctor and Gamble? Perhaps we beat them with our Census hiring though.</p>

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"The increase in hiring target indicates that the macro scene may be uncertain, but the demand environment is strong," Shah (TATA) said.

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<p>This sentence summarizes the situation of offshore vendors today.</p>

<p>Contrast these two pages:
Strong</a> global demand drives TCS profit up 35 pct - BusinessWeek</p>

<p>AND </p>

<p>layoff</a> - Google Search</p>

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<p>Nah. These jobs are becoming more difficult to get. Companies want workers who will stay through the entire holiday season. And just enough less than full time so that they don’t qualify for benefits. And considering all the small businesses that will be laying off employess, you will have a good amount of competition, even for the local Wal-Mart.</p>

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<p>How many people here are going to say crap like this that gets people thinking crazy things!? You realize that the term “engineer” applies to literally thousands of other types of jobs and literally millions of American jobs. It is a very small subset of these that are affected by outsourcing.</p>

<p>Next time, specify what you are talking about… engineers working in the IT/Computer sector. For the rest of us, this stuff honestly doesn’t really play into our job prospects.</p>

<p>there should be a separate “off-shoring/h1b conspiracy” forum</p>

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<p>There is no conspiracy at all. It is just accurate reporting of the facts. Homer89, Engineer10, Observer128, and I try to cite the facts when they are available.</p>

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<p>Certainly more than a small minority. If that is the case, why is there 16% unemployment at my above-average engineering school among graduating seniors? Certainly corporate cuts on hiring are a part of the answer but the other part is that US companies are less reliant on US engineers than they have ever been in the past.</p>

<p>Certainly, TATA, WIPRO and INFOSYS deal almost exclusively with software and business processes. But engineering companies are doing offshoring without dealing with the middle man. Companies like GE and Ford are just setting up R&D plants up in China amidst layoffs in the United States. What would you call this? It is definitely a form of offshoring though it is not outsourcing. </p>

<p>It also seems that a lot of people on this forum do not recognize the difference between offshoring and outsourcing. One is not necessarily harmful to the US economy and one is almost always harmful to the US economy.</p>

<p>There is a 16% unemployment at your school becase the economy has been in the tank for 2 years now. No one is doing that great. 16% is still much better than most other majors right now.</p>

<p>I woul love some examples of how all the ME/AE/CivE/etc guys are getting hurt by outsourcing according to you. In short, it isn’t happening in any significant way.</p>

<p>Read: [A</a> Shift in Engineering Offshoring - March 2009 Issue](<a href=“ASME News - ASME”>ASME News - ASME)</p>

<p>Engineering offshoring in other fields (ME/AE) is experiencing its initial tremors right now although the massive shock wave has yet to strike. For example, Ford is offshoring automotive design to India. Companies are exporting laptop design to companies like Foxconn, ASUS, and other companies. Sometimes, these companies like ACER, ASUS and HTC are manufacturing these devices but they are branded differently.</p>

<p>At some point, some company will succeed at large scale offshoring of these fields and other companies will pick up and the wave will travel almost as fast as for IT. The equipment will be cheaper to mass produced, etc.</p>

<p>Biotech/pharmaceutical research and chemical engineering have been partially offshored for quite a while now.</p>

<p>Engineering offshoring train has certainly taken off.</p>

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<p>Evidence? There is nothing to support this. We are talking different industries here. It is easier to send some things away than others. What makes you so sure that there will suddenly be this massive flood of ME/AE/CivE jobs heading away from the US? The simple answer is you don’t have any backing evidence. No one does. Do you know why? Because as the article states, the outsourcing “problem” in these fields is very minor… “initial tremors.” To stick with the analogy, not all tremors are followed by earthquakes.</p>

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<p>Your own source disputes this. It hasn’t taken off. Furthermore, there is no data to support whether it will or won’t. It even says that while companies move some manufacturing overseas, most if not all R&D will remain here, and it never says that just because a plant gets built in China that suddenly a plant has to close here. It is called an emerging market for a reason. They build the factories to keep up with demand there by creating new supply, not just to shift supply around.</p>

<p>Sweeping generalizations get you nowhere.</p>

<p>No sweeping generalization. I mean, hard stats aren’t as readily available for non IT/CS/ECE offshoring since other offshoring is a more recent phenomenon. </p>

<p>But offshoring has been very successful in automotive design to India:
[Automotive</a> Design Offshoring to India](<a href=“http://www.sourcingmag.com/content/c060927a.asp]Automotive”>http://www.sourcingmag.com/content/c060927a.asp)</p>

<p>And offshoring for IT started at the low end (software testing, content management and organization) and then moved to the higher end (real software engineering and application development). Now even the highest end engineering (research and development) is being carried out in India. Look at Microsoft Research, Intel Research, IBM research labs. They are hiring slowly in the US but the rate is rapid in India.</p>

<p>Now if automotive design can be offshored, eventually higher level work can be offshored. The advanced and expensive equipment can be built anywhere. Basically this is what I see: as long as the result to the consumer is the same, it doesn’t matter at all where or how the work got done.</p>

<p>IT was first to be offshored because of the internet. From a software modularity point of view, one US IT group can be replaced (as a “module”) by a team in India with very little effect on the customer. Certainly, cultural clashes and time zone differences are an issue but companies are willing to put up with that given the cost savings.</p>

<p>Some jobs such as teaching, medicine, nursing, and law (for now) are difficult to offshore.</p>

<p>As demonstrated before, you gve a limited grasp on what you are talking about sometimes. What makes you so sure that other industries will follow the same pattern as IT? </p>

<p>Here is a true example. Boeing moved some manufacturing offshore for a while. Eventually, they severed ties with those companies and began manufacturing said parts in the states again, even opening new factories. Not all industries are easy to offshore economically. In Boeing’s case, it hurt the bottom line.</p>

<p>How about the fact that even while Ford may have built manufacturing plants outside the country, there are manufacturing plants and R&D facilities in the US for Toyota, Nissan, and Honda. Probably others. Sure some stuff gets offshored, but in some of those industries, things get “onshored” as well, especially in the case of industries where products are expensive to ship (cars, planes, etc). It is cheaper to build a new facility in your market than to ship the huge products overseas to your market.</p>

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regardless of what the truth is, it is still a conspiracy in the sense that the lobbying is often masked or hidden</p>

<p>i do think it is going on, esp. amongst the big corporations, but not all companies really care about raising the cap, because bringing people in is expensive for small firms etc etc</p>

<p>my issue with all this talk about offshoring/onshoring is that it seems kinda pointless. if your future job is so threatened, then why are you pursuing it?</p>

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<p>I never said they weren’t. However, since your article that is from 2008, Boeing has announced new manufacturing plants in both South Carolina and Illinois as well. They have publicly stated that they are bring things back closer to home due to the problems with coordinating major manufacturing ventures with so many overseas partners and quality control issues.</p>

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<p>Read the article you just posted. Boeing is not outsourcing its engineering to Tata Motors, just manufacturing. You can’t have it both ways. Does manufacturing count or not? Boeing still does all of its design work in house, in the US. In fact, the parts Tata is manufacturing are mostly for older military craft that are being built over there so that they can be exported to India and Saudi Arabia. That joint venture isn’t losing any business for Americans, it is just creating more business overall for Boeing.</p>

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<p>Where is your proof of this now? Boeing outsourced manufacturing. They did not outsource R&D. The Dreamliner R&D was done right at home in Everett, WA and a handful of other places. Final assembly takes place in one of two places, both in the US. The only part of it that has been outsourced is making certain components. As I mentioned before, it was this exact example that led to Boeing now doing MORE things in-house, because all of the outsourcing was partially responsible for the huge delays in having the 787 ready on time.</p>

<p>Airbus (EADS) is a European company. It has never had R&D in the US. It has never had manufacturing in the US until recently. Whether Airbus outsources or not is hardly our concern. Let the French and English worry about them, because they are the only ones affected if EADS wants to send jobs to Tunisia.</p>

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<p>This doesn’t have to do with anything I have been talking about. We all know the telecom industry is outsourced heavily. Why continue to beat it to death. Furthermore, you have cited that source before, and while it seems to be a worthy source with worthy points, it also has things in it that serve to damp out the extreme claims you make. For example, it points out the lack of real quality data on outsourcing and how that leads to the fact that the greater impact of the practice is still currently unknown.</p>

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<p>When schools reports said statistics, they do it based on employment surveys. I have a feeling that any engineering graduate given such a survey would write unemployed if they were working at McDonald’s. I know I would.</p>

<p>Furthermore, the anecdotes about people giving up looking for work and going to graduate school are played up way too much. Getting into graduate school is not an easy task. The majority of the time, if someone gets into graduate school, they were fairly high up in their class and could have gotten a job. The vast majority of grad students are there because they want to be, not because they have to be. As someone who has personal experience with this, I would suggest you, someone who has no experience with this, not argue the point. I don’t know a single person that is in graduate school because they couldn’t get a job. That includes the fairly large number of people I know at several major universities.</p>

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<p>Again, I never disputed this. EE outsourcing lies largely in the computer and electronic circuit industry, which everyone already admits has outsourcing problems to at least some degree. EE is still predicted to grow in the US though simply because there are other areas of EE that aren’t as affected.</p>

<p>^ Thanks boneh3ad for confirming my hypothesis. I want to do a Ph.D in computer science because I want to work in an industrial research lab on the latest applications of theory and I was wondering whether people do Ph.D.'s instead of getting jobs. Thanks for reaffirming that it isn’t true. I would hope to be among a group who wants to do what they are doing over a group who is forced to do what they are doing without any other options.</p>

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<p>Plenty of unfunded MS programs let anybody in.</p>

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<p>Most unfunded MS/MEng programs are primarily meant as methods for a company to send an employee through the degree program without requiring a thesis since companies can afford to pay that kind of money. Programs make a ton of money that way. The admissions standards aren’t as high because those people won’t be producing papers with university’s name on them and won’t be wasting the university’s money, so they aren’t as concerned with the quality of the student and it won’t reflect as poorly on the school if the student just isn’t that bright.</p>

<p>In my experience, there aren’t a ton of people in those non-thesis, unfunded programs that aren’t being sponsored by a company. It does happen, but it just isn’t that common most places. Most people who go to graduate school right out of undergrad do the thesis option, and those often (not always) get funded eventually.</p>

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<p>Thanks for reinforcing my point. That was outsourcing of parts, not major design. When it says design there, it is talking about designing of manufacturing processes and on-the-fly changes that need to be done for manufacturability purposes, not heavy R&D work done towards building a new plane. Boeing outsourced a lot of the plane components, not the design or final assembly.</p>

<p>The article also makes note of exactly what I said: Boeing is cutting back on that practice because it bit them in the butt. The practice directly led to them coming back towards keeping more work domestic.</p>

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<p>The only specific things being mentioned in this article as being outsourced are, again, manufacturing and IT.</p>

<p>Furthermore, I find it hard to trust a source posted on a website dedicated to developing a Unix VM program.</p>

<p>^^ It seems that the graduate schools these people are applying to due to the recession are business schools not engineering schools.</p>

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<p>Cool… so MBA programs are filled with people weathering the storm. What does that have to do with engineering?</p>

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<p>Again, this is talking about graduate school as a whole, not engineering. Additionally, while an engineering program may get more applications, it is still the top students that will get in, and those top students could get jobs if they wanted to. Again, I don’t know a single person that I graduated with or that I have dealt with on a graduate level who didn’t have a job and went to grad school instead. Every engineering grad student I know had at least one job offer if they attempted to get one. Myself, I only half tried and still came up with two offers right in the heart of the recession.</p>

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<p>While this does mention engineering, it also only says that applications were up. As previously discussed, this does not mean that there are more people actually GOING to graduate school, just more applying. Those unemployed are still not going to get in ahead of the top students, who likely had job offers anyway.</p>

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<p>It is a software services company. They are not doing the physical design of the plane. Based on that article combined with experience, they are talking about design software. The work done there is the analog to what a CAD monkey would do. They technically take part in design, but they aren’t making the design decisions, they are just coding it up. The majority of that outsourcing is IT services though.</p>

<p>You aren’t going to win this one. You have demonstrated a clear lack of knowledge about engineering, especially aerospace engineering. Googling articles does not make you an expert. Having experience in engineering would allow you to read these articles and understand how to read them and read between the lines to understand what is actually going on.</p>

<p>^ True in a way. I suppose one could Google any claim and get a few articles that support the claim.</p>

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<p>I never made this claim. Homer82…err…Observer128 made this claim. I mean we agree on a lot of things but not on everything. This is an area I have very limited knowledge about. I just countered to say that his articles don’t support that people go to ENGINEERING GRADUATE SCHOOL because they cannot get a job.</p>

<p>^Right, that is why it followed a quote of his post, not yours.</p>

<p>Most outsourcing probably occurs within fields where knowledge is weakly “tied” to a physical location. Think software engineering work that may be performed almost anywhere vs. nuclear engineering work that is tied to a nuclear plant or nuclear equipment manufacturing facility.</p>

<p>I’ve been thinking about this offshoring issue for a bit and I’m beginning to think it’s a blessing in disguise. I’m 100% positive there are several unemployed engineers somewhere utilizing their free time doing some innovative thinking. Necessity is the mother of invention. If you are hungry, you’ll figure out a way to get food, rather quickly. The next “boom” field may come from some unemployed, hungry engineer. And quite frankly, this country needs a dose of reality.</p>

<p>What is actually troubling me nowadays is the “seeding-out” issue. Basically, we are educating a bunch of foreigners at our universities (seeding) and then we allow them to leave the country with advanced knowledge (out). We should be making every effort possible to assimilate these foreigners into our culture.</p>