IBM dominated the early decades of computing with inventions like the mainframe and the floppy disk. Its offices and factories, stretching from upstate New York to Silicon Valley, were hubs of American innovation long before Microsoft or Google came along. “But over the last decade, IBM has shifted its center of gravity halfway around the world to India, making it a high-tech example of the globalization trends that the Trump administration has railed against,” writes The New York Times (Oct. 1, 2017).
Today, the company employs 130,000 people in India — 1/3 of its total work force, and more than in any other country. Their work spans the entire gamut of IBM’s businesses, from managing the computing needs of global giants like AT&T and Shell to performing cutting-edge research in fields like visual search, A.I. and computer vision for self-driving cars. The work in India has been vital to keeping down costs at IBM, which has posted 21 consecutive quarters of revenue declines as it has struggled to refashion its main business of supplying tech services to corporations and governments.
The tech industry has been shifting jobs overseas for decades, but IBM is unusual because it employs more people in a single foreign country than it does at home. The company’s employment in India has nearly doubled since 2007, even as its work force in the U.S. has shrunk through waves of layoffs and buyouts. It employs well under 100,000 people in the U.S. now, down from 130,000 in 2007. The salaries paid to Indian workers are 1/2 to 1/5 those paid here, and the range of work done by IBM in India shows that offshoring threatens even the best-paying American tech jobs.
Classroom discussion questions:
- When the trend in manufacturing is “reshoring,” why is IBM offshoring more?
- What other industries are outsourcing to India?