
IBM Now Has More Employees in India Than in the U.S - perseusprime11
https://www.nytimes.com/2017/09/28/technology/ibm-india.html
======
pavanred
Everyone seems to be making the assumption that all the work IBM India does is
outsourced from US. IBM India is the biggest domestic IT player in India with
clients like Airtel, Indian Railways, HDFC etc.; IBM India also services
clients from other countries in the world (which wouldn't have happened
otherwise because its too expensive in the US). And, IBM India, has a few
research labs setup that do independent research.

Considering this, how is the number of employees in India and US even a
relevant question. Isn't it similar to say why is there more manufacturing
workforce in China when compared to US for company X? We know why, it costs
less for the company and the client, and taking advantage of it opened up new
markets/demand.

~~~
blizkreeg
You're getting a little defensive here. IBM was one of the crown jewels of
American industry. It was an iconic company in its time. The fact that it now
employs more people in India than the US is something to ponder. It isn't so
much about the merits of outsourcing.

Everything can be done cheaper by getting it done in another part of the
world. Should it be? Sometimes the answer is yes, at other times, not.

Imagine for a second that 50 years from today (when say India is in a place
where the US is today), many Indian jobs are outsourced to another country.
Same thing.

~~~
794CD01
That was merely an accident of history. The I in IBM doesn't stand for
American.

~~~
adventured
It wasn't merely an accident. The US had a superior context which enabled
something like IBM to exist and thrive.

Name another country circa 1911 that could have produced IBM and enabled it to
acquire such vast global scale at its peak. There are only a handful of
nations that can even be considered as possible.

IBM came out of the US for the exact same reason Fairchild, Intel, Cisco,
Silicon Graphics, Motorola, Texas Instruments, HP, Sun, Xerox, AMD, Apple,
Qualcomm, etc. all did.

~~~
BeetleB
>IBM came out of the US for the exact same reason Fairchild, Intel, Cisco,
Silicon Graphics, Motorola, Texas Instruments, HP, Sun, Xerox, AMD, Apple,
Qualcomm, etc. all did.

By that reasoning, IBM is outsourcing from the US for exactly the same reason
virtually all the other companies you listed are.

Sure, something about the US helped them to exist and thrive. And something
about the US is helping them to outsource.

The argument cuts both ways.

~~~
adventured
> By that reasoning, IBM is outsourcing from the US for exactly the same
> reason virtually all the other companies you listed are.

Of course. Most of the outsourcing has been about labor costs. The US has
among the highest labor costs on the the planet, the nations (Vietnam, China,
India, Mexico, etc) that the US has heavily outsourced to - whether
manufacturing or IT - are or were far lower net cost nations to do those
outsourced things in.

What's cutting against the US is mostly obvious: incomes are very high,
infrastructure costs are far too high (impacts almost everything in the cost
structure in the US, from transportation to manufacturing), the effective
corporate income tax rate in the US is among the highest (while many developed
nations are aggressively lowering their rates), vast & rapid growth in
economic regulations over the last 30-40 years, large expansion of general
burden on business formation over that time (taxes, regulation, red tape,
abusive zoning laws, etc.; leading to far lower dynamism in the US economy,
weak productivity growth, perpetually falling new business formation, etc).

~~~
azinman2
And yet it’s still the top economy. I don’t buy this narrative — if
regulations and taxes were such a problem, the US would have never climbed to
the position it’s at.

------
timthelion
I think that this is a good example of how racism, conscious and unconscious
is making us worse at predicting the future. Ten years ago, so many Americans
were making jokes about poor quality Indian code and Indian accents. The idea
of Indians actually working innovative jobs seemed laughable to many
Americans. But there wasn't actually strong evidence that Indians were less
good at doing cutting edge research.

This racism is again mirrored in the huge salary difference. Are those Indian
workers really worth so much less?

One thing is certain to me, that low salary is hurting IBM. By not paying a
competitive salary, those IBM offices in India are lacking the deep experience
of western programmers. In a way, they have to re-invent the wheel. In the
pictures, everyone there is Indian, and that hurts the company as a whole.
Diversity is more than just not being all white. Diversity means not being
exclusive to any background and ethnicity.

Edit: I have yet to hear of anyone (European or American) from the sectors I
work in, being poached to work in India.

~~~
atarian
>Ten years ago, so many Americans were making jokes about poor quality Indian
code and Indian accents. The idea of Indians actually working innovative jobs
seemed laughable to many Americans.

As someone who grew up in America during that time, this is the exact opposite
that I was told by the media and teachers. We were taught that Indians were
just as effective (if not more) than people working in the US and that we
shouldn't select jobs that will be outsourced in the future (like
programming). In fact computer science enrollment in many colleges were at an
all-time low during that time because of outsourcing fear.

So I completely disagree with your generalization that many Americans thought
Indians were worse at programming.

~~~
jordanb
Yeah 2002-2005 or so the conventional wisdom is that there wouldn't be
software written in America anymore -- that companies were going to beat a
path to Asia just like they'd done in textiles and furniture.

Economists explained that software is a highly "tradeable good" and Asia --
especially India -- was filled with millions of highly educated cheap
programmers.

Given that the number of people employed in software in America has remained
constant since 2000, and that wages are about where they were then too, I
think the evidence is that there has been a substantial "pressure release
valve" effect going on. So while the most dire predictions of the 2000s
haven't come true, it's also true that the confident optimism of the 1990s ill
advised.

I would say that software development has been good to me so far as a career,
but I still think I would hesitate to encourage a young person in America to
pursue it.

~~~
pm90
> I would say that software development has been good to me so far as a
> career, but I still think I would hesitate to encourage a young person in
> America to pursue it.

This is absolutely terrible advice. Please do not ruin some young American's
life with this advice. Technology seems to be one are where the demand seems
to always outstrip supply, and a person trained in Computer Science would be
capable of learning new skills and advancing rapidly in the tech industry.

~~~
lovich
San Francisco seems to be the only place where that holds true, and I say that
not having tried to get a job there. The average length of time for engineers
I know of trying to get a new job is 3-4 months. Any one of us could easily be
a shit engineer but its in the 10s of people now. While that's better than a
lot of industries now, that doesn't mean that demand outstripped supply. Its
just at an ok point. If demand was much higher you'd see salaries rising
rapidly at least and I know of few companies that are willing to give
significant raises to keep someone vs hiring someone new. Why else is there
advice to job hop so frequently to increase your salary?

~~~
pm90
Giving raises to existing employees is not related to demand and supply at
all, but to other institutional reasons. Managers have more freedom to give
offer higher salaries to attract good talent, than they have to offer super
high raises, which can also cause discord among teams unless you offer raises
to everyone, which may be more money than the manager can afford.

Of course it depends on the market, but I disagree that is just SF. Seattle,
NYC, SoCal (LA, San Diego etc.), Boston, Austin all have a thriving tech
sector, although Bay Area still far outstrips them in demand and compensation.

~~~
lovich
Those other factors due exist for preventing raises to other employees. The
claim, however, was that demand was _far_ exceeding supply. When that happens
with any good people start hoarding the resource and going out of their way to
maintain their existing supply. If there was truly that great a difference
between the demand for software devs and the supply of them, we'd see
companies doing their best to keep their employees, at least on average.
Instead we're in a situation. Where companies are engaging in some sort of
brinkmanship with their employees to see if they'll accept the lack of
compensation increase, and they dont appear to care if they are loosing
employees due to it.

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kanwisher
Honestly I'm surprised this is just now the case. Last time I was in
Bengaluru(Bangalore). There were ads on billboards for programming jobs.
Everyone walking down the street had backpacks from major tech companies. The
sheer number of tech work there has to be massive

~~~
kylehotchkiss
I love India but lots of non-tech people have backpacks that say "Apple" with
an attempt at an apple logo on it :) i always smile when i see those

~~~
snambi
It is just marketing...

------
github-cat
This is not good for IBM indeed.

As lots of people know that IBM gets 21 consecutive revenue decline and it's
forced to cut down cost. But cutting down cost doesn't mean you should shift
your development work to under qualified developers or programmers. This will
further affect IBM's software quality and hurt its revenue. Why not putting
the money hiring less but good developers. If you are a developer, you would
find what that feels like to work with under qualified developers.

To be honest, have you heard about any impressive software product or solution
from IBM in recent years? I would blame this to a short-visioned management
team. Maybe its management team is thinking they could hire more below
averaged developers with the same money of hiring one good developer in hoping
that quantity can cover quality. In fact that's totally wrong in technology
field.

Moreover, those talented technical people are escaping because they are not
getting what they deserved. The management team is investing far less in
technical talents than in so-called business. The end result is that the
product quality will become worse and worse and customers would finally give
them up.

While other companies are attracting talented IT people by all means, IBM is
lost and it's driving them away.

~~~
samstave
I am just curious.. I havent purchased a single IBM roduct for maybe more than
a decade (professionally and personally) -- the last major professional
purchase was an AS/400 upgrade... 1998?

I have never bought an IBM-->lenovo laptop, although I have been provisioned
some in various jobs...

What other main product(s) does IBM have that I would want?

they have great eng resources, scientists, etc... but I just dont see any of
my money headed their way any time soon...

~~~
jstarfish
As a consumer, probably nothing.

But they still sell a lot of big iron to banks and FIs and try to shove QRadar
down everyone's throat.

~~~
github-cat
Those irons are only a small portion of IBM revenue now due to cloud. But they
haven't put the correct resource on cloud and software. It was working in the
past even though its software is very difficult to use. But now it's the other
way around.

------
e40
The real question is (and this is serious): how is it working out for them?

~~~
DarronWyke
Badly. They've lost many clients because of it. Disney was one of their
biggest; they jumped ship a few years ago due to constant missed deadlines and
poor work.

I used to work for IBM. We had a few workers in India who were decent to good,
but most of them are just seat warmers. Their work was abysmal and required
frequent re-doing.

~~~
maccard
really? I distinctly remember Disney doing the exact same thing, to the point
where they paid their current employees to train their own offshore
replacements [0]

[0] [https://www.nytimes.com/2015/06/04/us/last-task-after-
layoff...](https://www.nytimes.com/2015/06/04/us/last-task-after-layoff-at-
disney-train-foreign-replacements.html?mcubz=3)

~~~
bduerst
There's a difference between offshoring and outsourcing to H1B visa
exploiters.

------
ashwinaj
The discussion seems to be diverted to outsourcing; whether it is good or bad.
If I were an IBM shareholder, I want to know who is holding the IBM execs
accountable? For years they have underperformed, whatever metric you care to
use to reach that conclusion; they seem to be unaffected by outsourcing and
have golden parachutes.

To hide their technical/execution incompetency they outsource jobs and cook
the books. It is moot to discuss outsourcing, the real problems are: 1\. The
widening wage gap between a regular employee and an executive

2\. Complete lack of accountability of executives

3\. Despite their pathetic performance are getting richer and richer

------
southphillyman
It's a multinational corporation, I don't see a problem with it on a surface
level since they have no real obligation to maintain some arbitrary percentage
of American workers. The current climate of companies needing to continually
push down cost to compete is the new normal and there will be various
ramifications as further globalization opens up more cost saving
opportunities. Maybe it will hit a turning point where we reevaluate how the
health of firms are gauged but I doubt it.

~~~
crispyambulance
The thing that bothers me is not so much that technical and implementation
work goes straight to India and manufacturing goes to China, Mexico, etc.

The thing that bothers me is that there's so many goddamn "project management
professionals" state-side. It's like now students are coming out of college
and going straight into project management doing bullshit work. American
industry is in a downward spiral, we're training our competitors. These "low-
cost-centers" are going to eat our lunch at some point in the future. They
will be lean, efficient, creative, business savvy, and ready for anything. In
the United states we'll all just be a bunch of useless PM's and supply chain
specialists who can barely do more than work a phone. It will be like taking
candy from a baby. Of course the execs that forced all this will be retired
and living filthy rich by then.

~~~
southphillyman
Ha, I have a MIS BA actually. Most of my former classmates took the PM/BA
route post graduation and generally all are successful according to Linkedin
including a guy who runs his own investment bank and another pretty high up at
Amazon apparently. I think so many people go that route because people who can
"speak tech" and "speak business" are incredibly valuable now days. At least
that's the reasoning that sold me on it, despite me now being almost
completely technical. I have personally seen individuals on the same team with
similar skills have careers diverge dramatically because one person could
present in front of a room and another couldn't. The PM types are on the front
lines and get all the credit because they are "selling" the product or
business. I get why it's attractive to some.

------
megaman22
This should come as a surprise to no one. They've been gutting their US-based,
long-tenured locations and staff for a long time.

------
NKosmatos
I guess the I in IBM, now stands for Indian. [It's a joke, don't take this
seriously :-)]

~~~
samstave
___I_ __ndia, __ _B_ __angalore, __ _M_ __umbai

------
gourabmi
I'm not surprised. As H1-B regulations keep getting more strict, this
phenomenon will spread to other big players in the industry.

~~~
pkaye
What regulations have gotten strict? From last I read, the changes that Trump
proposed seems to have gotten nowhere. Yet IBM has been shifting the worker
base to India for decades.

~~~
kevin_thibedeau
> the changes that Trump proposed seems to have gotten nowhere

Revisions to H1B are "under review". It may all be just smoke and mirrors but
it would be an easy, and legal, way for Trump to meet one of his campaign
initiatives.

EO 13788:

(b) In order to promote the proper functioning of the H-1B visa program, the
Secretary of State, the Attorney General, the Secretary of Labor, and the
Secretary of Homeland Security shall, as soon as practicable, suggest reforms
to help ensure that H-1B visas are awarded to the most-skilled or highest-paid
petition beneficiaries.

------
jgh
Time for Americans to start moving to India and waiting 20 years for permanent
residency ;)

------
yeukhon
For those working at IBM, how do you feel about your job in general? I have a
couple friends working for IBM now or before, from what I gathered, unless you
work in the research division or in the smart city project, the rest felt
unimportant. These negative sentiments perhaps just edge cases...

~~~
framebit
IBM is best understood as a collection of disparate companies that have very
little to do with each other in the day-to-day. There are generalizations to
be made about the company as a whole, but the experience of working for IBM in
division ABC is going to be vastly different from the experience of working in
division DEF.

------
jakelarkin
Sadly it seems IBM is mostly a sales & marketing operation for high-markup
low-quality IT labor. MBA management of tech as a cost center has reached its
next milestone. Of course, in the long-run, a company can't succeed by gutting
its core competency.

------
alpha_whiskey
It's bound to happen. Stricter H1-B policy actually will negatively impact the
Americans. DO you need more proof than this?

~~~
davesque
If there were looser H1-B policies, wouldn't jobs still go to non-Americans
but just not over seas?

~~~
zerr
H1B lottery-based system is crap. There should be deterministic, points-based,
uncapped immigration scheme tailored for highly skilled and paid talent,
similar to Canada and Australia I believe.

~~~
Antrikshy
I'm on H-1B now, and the process was extremely frustrating. I would love to
see what you describe be put in place.

------
mirrormind
I am an Indian and i will tell you how it is. Most indians in india and the
valley where i live and work suck in programming. I can't say how i do because
we can never judge ourselves objectively. Indians in India write bad code
because they will they are being cheated and being paid less money. The other
issue is the education system is to memorize stuff and get a job so they can
make money. There is no passion to do great or decent work. The end goal is to
keep a job and make money. The same is true for people who work for google or
amazon. They memorize the damn interview questions and get the job. Now all
this is my experience with majority. So don't ask me for a study. I am sure
there are exceptional programmers, founders that are Indian but majority
aren't.

~~~
snambi
Majority of programmers are bad. It is nothing to do with race or nationality.
People are taking to programming because it pays well and there is demand.
Most companies hire a person with good attitude than a great programmer with
bad attitude.

~~~
mirrormind
"People are taking to programming because it pays well and there is demand."
This statement is wrong. Not everyone takes to programming only for that sole
reason. In america people tend to follow their passion first.

~~~
snambi
Passion doesn't guarantee quality. I have seen "passionate" engineers, failing
to understand the problem. "Passionate" engineers tend to find a problem for
the solution they have at hand. It is very hard to work with such people.

------
njharman
Aren't there more people in India? Why is this suprising / news?

Did you think global companies weren't global?

Did you imagine corporations we're patriotic or loyal in some way?

Do you hope free marketism cares about anything than efficient allocation of
resources / maximum profits?

------
chrshawkes
I find it disturbing as an American software developer that Americans (mostly)
created companies like IBM and all their products, but since IBM has basically
missed the boat on every major technological breakthrough over the last 30
years it's no wonder they are doing anything they can to stop the death
spiral. I hope IBM goes out of business as quickly as possible and before that
happens they should move their HQ to India.

Is it time to start talking about unionizing software developers? To protect
their jobs, creative freedoms and the rampant ageism that exists in Silicon
Valley?

------
calvinbhai
Would this be true if high skilled legal immigration system in USA wasn’t
broken?

If IBM had zero restrictions on importing skilled labor, IBM USA would
probably still be larger than IBM India.

~~~
indubitable
At a high enough level a company's customers and employees are one and the
same. Exploiting labor can lead directly to a tragedy of the commons. If all
companies were able to pursue the cheapest labor possible on a worldwide
scale, then the overall disposable income in this nation would proportionally
decrease. That income is precisely what ends up being used to purchase a
company's products and fund their ventures. In the big picture - when all
companies pay less, they end up earning less.

This is also ignoring local effects. As domestic workers are displaced by the
cheapest workers across the world, unemployment would increase. As wages
decrease and revenues fall you have the ideal scenario to start an economic
depression. Rising unemployment and an economy in depression is something that
is extremely difficult to stop once it starts. Fear of even the hint of this
happening is part of the reason we're already flirting with ostensibly insane
economic measures ranging from quantitative easing to negative interest rates.

------
sriram_sun
I've heard some B-school grads refer to this as some "inflection point". They
were talking about more overseas workers for IBM in 2006 or so. The more
important question is in which direction does the money flow? It has to be net
positive for the US albeit not to US upper middle class programmers. My simple
rule of thumb is if the move is not filling up CxO level coffers, it won't
happen.

~~~
timthelion
Why would it have to be net positive for the US?

If $100 million flows from AT&T to IBM. And IBM pockets $10 million and sends
$90 million to India, that would be a net -$90 million for the US economy.

~~~
fixermark
That's assuming the $100 million flow in question can happen at all without
the India piece of the puzzle. Another way to think about it might be "$100
million wealth flowed (and taxes paid on it, and salaries paid, &c), $90
million of which goes to India, vs. $0 wealth flowed (and so no taxes, no
paychecks, etc.)" A lot depends on the accounting of where AT&T got the $100
million at the start of this story, and what spending that $100 million
enables AT&T to do, whether this flow turns out to benefit both the US and
India, mostly the US, mostly India, or neither.

------
thisisit
And here I thought IBM was firing more people in India:
[http://profit.ndtv.com/news/tech-media-telecom/article-
ibm-i...](http://profit.ndtv.com/news/tech-media-telecom/article-ibm-india-
denies-report-of-5-000-possible-layoffs-in-coming-months-1694397)

Where do these jobs go?

------
singaraja
Standing by its name now. Truly International!!

~~~
FroshKiller
They were notoriously international in the '30s and '40s.

------
balls187
It does stand for International Business Machines.

Randomly, Amazon employs over 350,000 people, 25,000 of which are here in
Seattle.

------
Dowwie
What's missing from the discussion here is the business that IBM receives from
the United States government-- Billions of dollars in contracts. If you are
unhappy with IBM's practices, let your elected House officials know why. They
may be able to do something about that.

------
mathattack
I'm very surprised that it took this long. This was true for Accenture may
years ago.

~~~
froogler
This is actually old news. Here's one from 2012 :
[http://www.livemint.com/Opinion/NHnLRi9Gn5LQFX1Z2CnG0N/IBM-e...](http://www.livemint.com/Opinion/NHnLRi9Gn5LQFX1Z2CnG0N/IBM-
employs-more-staff-in-India-than-its-US-workforce.html)

------
tdeck
Is this news? This was mentioned in a 2012 TED talk:

[https://www.ted.com/talks/nirmalya_kumar_india_s_invisible_e...](https://www.ted.com/talks/nirmalya_kumar_india_s_invisible_entrepreneurs)

(at the end)

------
chisleu
I worked on a data science team at IBM in the Watson division and most of the
people in my group in America were Indian or Pakistani.

------
bitmapbrother
I wonder if those Indians know that it's only a matter of time before their
job gets relocated to another country with lower wages.

------
alunchbox
I wonder if this might have a reason why the Phoenix Payroll system was such a
disaster. Originally the estimate was for $5.7 mil but somehow it is now
costing 32x more (~185 mil)[1], mind you, this is Canadians tax-payers money
:(. Not to mention the ball they dropped with Queensland (beyond any software
horror story I've read to date).

It must be difficult having two hugely different cultures & work ethics trying
to work in synchronicity to complete this type of project. (I'm only
speculating that the project was done by their India teams and not the
US/Canadian teams)

[1] [http://www.cbc.ca/news/canada/ottawa/phoenix-ibm-contract-
un...](http://www.cbc.ca/news/canada/ottawa/phoenix-ibm-contract-union-pay-
government-1.4295827)

