IBM explores shifting jobs out of U.S.

Several top IBM Corp. executives are discussing plans to move some U.S. positions to other countries with less expensive labor and infrastructure costs, according to officials at two organizations seeking to unionize IT workers.

To remain competitive, IBM will need to accelerate the shift of "white collar" service jobs to markets including India and China, IBM Global Employee Relations Director Tom Lynch said in a recent company conference call, according to the New York Times, which received a leaked copy of a recording of the call that was posted internally on an IBM Web site.

The Seattle-based Washington Alliance of Technology Workers passed the recording on to the newspaper, and to Alliance at IBM, an Endicott, New York, activist organization of current and former IBM employees. Alliance at IBM is planning a series of meetings with IBM staff to discuss the audio recording and associated slide presentation. It held the first last night in San Jose, California, and plans future seminars near IBM sites in New York, Vermont and North Carolina.

The package is "more or less a smoking gun," said group organizer Lee Conrad, who left IBM in 2000 after a 26-year career there in manufacturing.

"We'd been getting inklings of this," Conrad said. "What we are seeing is a continuation of IBM's policy of offshoring jobs. It started with manufacturing, and they're now doing this with IT."

An IBM representative said there are no formal plans to move jobs out of the U.S. to areas with lower labor costs.

"This is not about shifting jobs. Our workforce in the U.S. is growing -- in 2003, growth in the U.S. will outpace growth in the rest of the world," IBM spokesman Joe Stunkard said. "We have a distinctly different global employment model than many other companies that may be feeding on wage differentials in other nations."

With a majority of its revenue generated outside North America, IBM already has more than half its employees based in countries other than the U.S., Stunkard noted.

But to Alliance at IBM, the recorded conference call illustrates a disturbing trend: The disappearance of jobs for skilled IT workers such as programmers and engineers. The ongoing shift represents a "dire economic threat to high-tech employees" and to the U.S economy overall, Conrad said.

Researchers say employees have cause to worry. By the end of 2004, Gartner Inc. estimates that one of every 10 jobs within U.S.-based IT vendors and service providers will move out of the U.S. to emerging markets, displacing some 500,000 workers.

"The scenario for the IT workforce in the United States and other developed nations looks bleak. Large U.S. enterprises, vendors and service providers aggressively are investigating or pursuing offshore markets for IT delivery," the company said in a recent research report. "Through 2005, fewer than 40 percent of people whose jobs are moved to emerging markets will be redeployed by their current employers."

As companies begin taking advantage of low-cost labor markets, legislators are jumping into the fray and considering legal and political options for keeping jobs in place. IBM's executives discussed that during their conference call, according to the New York Times' account. The newspaper quotes Lynch suggesting that government officials are likely to raise "some level of concern and investigation" over shifted jobs, especially with a lagging economy making it difficult for displaced workers to find new jobs.