
San Francisco university lays off IT workers, jobs head to India - SQL2219
https://www.yahoo.com/news/san-francisco-university-lays-off-workers-jobs-head-015039330--finance.html
======
jmcdiesel
Can someone give an actual moral reason why this is bad?

Can you explain to me why where you geographically located needs to matter? Or
why Americans should be or feel entitled to jobs? If someone is willing to do
it cheaper, than a business is dumb to pay more just to reinforce nationalism.

This weird entitlement around jobs in America is strange to me. I appreciate
the living hell out of my job, because I know it could be done by someone
outside the US for cheaper (and my Company has a tech office in Bangalore).
You can't appreciate something and expect it/be entitled to it at the same
time.

Regardless of the rest though, that moral question is what matters - what is
immoral about hiring people outside of your country? Why is nationalism
considered a virtue?

~~~
eli_gottlieb
You're asking an implicitly deontological question with an explicitly
consequentialist answer. This kind of "outsourcing economy" _has been tried_ ,
and we have observed mostly negative effects. It deskills the country which
pays for the goods, creates trade imbalances that help to break down what's
left of our international system, impoverishes the people who are disemployed,
and exploits the people who are newly employed.

Worse, the gains-from-trade that economists say ought to occur are allocated
entirely to the owners of firms and equities, rather than being redistributed
to the former workers to help smooth out economic transitions.

>This weird entitlement around jobs in America is strange to me.

That's because America's not willing to spend any resources on retraining
workers or redistributing wealth away from the owning class, so "jobs" are the
one thing people absolutely need to stay alive.

~~~
hyperliner
Loved your answer but adding some explanations for those of us not as smart as
you:

Deontological ethics or deontology (from Greek δέον, deon, "obligation, duty")
is the normative ethical position that judges the morality of an action based
on rules. It is sometimes described as "duty-" or "obligation-" or "rule-"
based ethics, because rules "bind you to your duty."

Consequentialism is the class of normative ethical theories holding that the
consequences of one's conduct are the ultimate basis for any judgment about
the rightness or wrongness of that conduct.

~~~
eli_gottlieb
Gaaah, I should make some coffee. Big words come out when I don't drink enough
caffeine to use small ones.

~~~
dallamaneni
Or just use EasyWrite :
[http://easywrite.parishod.com/](http://easywrite.parishod.com/)

------
dekhn
An important point, not well-covered. The employees worked for UCSF Medical
Center, which is a corporation affiliated with UCSF. It's not actually a
university- it's a hospital. There is a huge, weird overlap between UCSF and
UCSF Health/Medical Center.

Also, UCSF Health is known for having merged with Stanford Health (they
claimed both of them would go out of business if they didn't merge), laying
off its entire staff, then rehiring them with a limited contract, and then un-
merging:
[https://alumni.stanford.edu/get/page/magazine/article/?artic...](https://alumni.stanford.edu/get/page/magazine/article/?article_id=40228)

(disclaimer: I was a PhD student at UCSF during the debacle).

~~~
devoply
Sounds like incompetent management led by MBAs gone wild. Imagine all the cost
savings guys.

~~~
formula1
I would argue competent and effective management by people who view profits
worth more than ensuring everyone can enjoy life. These people aren't idiots,
they understand game theory, supply and demand and cost cutting to the point
they are paid absurd amounts to do the work they do. In my opinion, techs
problem is that the builders/maintainers trust leadership not to cut off their
heads. Only friends are safe.

~~~
devoply
The reason that they are paid a lot is because they can justify their pay in
terms of cost-savings. If you have a large company paying tens of millions in
salary and you cut out a few jobs you can save the company a million dollars.
For that you can justify a 1% pay, say 150k or 250k.

Funny thing is the tools are dumb in that they can't actually predict the
long-term and mid-term effects of bringing on such a change. And this is a
text-book case of that because they have reverted back to independent
entities. Like for instance knowledge lost. How do you account for that? Loss
of morale? How do you account for that. Communication problems, etc. etc. etc.
All these things can be a competitive advantages or disadvantages for a
corporation. They can potentially make or break a company.

In fact someone should create an AI called MBA AI to do this sort of shit and
make a killing doing it. Just replace idiot MBAs with their dumb tools with an
AI. It should be simple enough to automate to generate cost saving estimates
and so on. Without actually being able to predict the actual outcome in any
meaningful way.

I will finally add that in the end Jurassic Park was caused by an underpaid IT
contractor.

------
teddyc
I worked in IT at a university for 7 years. I do not see this saving money
over the 5 year term. It probably would have made more sense to relocate the
IT staff out of the Bay area to a less costly location, but still be in the
same time zone and able to be on site if needed. Looking at the map, the
university looks land-locked and unable to expand. The idea of getting more
office or classroom space by eliminating onsite IT was probably enticing, in
addition to the expected cost savings.

~~~
calvinbhai
Of late I have felt that this is the technique used by companies to get ride
of older and expensive employees. A few years later they'll find that
outsourcing is not worth it , and start hiring younger people again. That's a
cheaper way to reduce healthcare and other costs that the employer has to pay
for every employee

~~~
jordanb
I think you're right and you can spot check it by looking at some of the
photos of the laid off workers in various articles about this move. They all
appear to be in their 50s at least.

------
calvinbhai
Many more jobs have been outsourced to India through American companies like
HP, IBM, DELL.

Is outsourcing a problem worth mentioning only when a company incorporated in
India gets such contracts?

Or, is there a subtle hint of racial/country bias against Indians?

I ask this because I never see such damning articles when whole
departments/section of companies are closed when outsourced to American
companies. And circumstances are very similar.

Older employees cost company more because of America's awesome healthcare and
insurance system. Techn knowledge gets commoditised and automated so quickly,
these older employees are almost always phased out by outsourcing the jobs.

It's just that when the company getting that contract is Indian, all hell
breaks loose.

~~~
fakename
"America's awesome healthcare and insurance system" Huh?

~~~
purple-again
We have some of the best healthcare in the world. Many of the rich elite from
around the world fly into the US for treatment.

We do however have a problem with accessing that healthcare. How do you
allocate limited resources? We chose capitalism to decide.

~~~
calvinbhai
True. Healthcare quality is "probably" great, if one can afford it. And that
indirectly means if the employer can afford to subsidize your health insurance
premiums so that you can afford that amazing healthcare.

"How do you access limited resources?" Why are the resources limited? How
about making medical education free (paid by US taxpayer), so that only those
who want to serve in the field of medicine will become doctors, and go on to
earn a good living if they are good doctors?

Why not generate 100x medicine graduates than current number?

Problem is with crony capitalism. Doctors dont want over supply of doctors.
Insurers are happy with constrained supply of healthcare. Richer people are
happy with what they can afford.

Not rich and aging population gets screwed!

------
ljoshua
I'm always curious about the math behind the cost savings in these types of
off-shoring arrangements. I'm sure I'm missing something here, but if the HCL
contract is for $50M, and they're claiming savings of $30M, that means that
the expenditures for the original 97 employees+contractors would have worked
out to approximately $825,000 per head, on average. ($80M / (49 + 48))

Now I know wages in the Bay Area are skewed, but even all in with benefits I'm
sure that's much higher than the salaries of the replaced individuals.

Best to those being replaced, I'm sure they'll be picked up by smarter
employers.

EDIT: Thanks to @jt2190 and @ar-jan for pointing out that I forgot to divide
by 5, which gives a much more reasonable answer. It's a little too early
here... ;)

~~~
jt2190
You forgot to divide by five years.

165 000 USD per head, on average. $80M / (49 + 48) / 5

Edit: the savings likely also include things like benefits, office space,
administration, etc.

------
ryandrake
Well, all we hear about anymore is the great "shortage of tech workers", so
this shouldn't be a huge problem. These folks will simply waltz into any
number of area tech firms tomorrow and find jobs with all these companies
"struggling to find talent", am I right?

~~~
ythn
The problem is that it is actually a "shortage of (cheap) tech workers".
Quality is expensive, and companies don't want to pay for expensive american
tech workers when they can cut costs by paying for cheap overseas tech
workers.

~~~
AstralStorm
The problem for US tech workers is that Eastern Europe is already ahead and
India and China are catching up.

Writing a web app can be done by anyone in the world. Writing a driver and
understanding intricacies of an operating system, fewer. Creating and
implementing new algorithms? Well...

Sucks to be them. US somehow killed its huge research advantage enjoyed by
years of successful brain drain from all over the world.

------
et2o
UCSF is one of the wealthiest medical research institutions in the world. It's
stunning they can't support an in house IT staff.

Granted, in my experience University IT staffs are generally pretty awful.
Usually, each individual lab will have one or two people with a lot of Linux
experience who end up doing all of the actual work.

~~~
redm
Contrast this with the Texas Medical Center (largest in the world [1]) in
Houston where the cost of living is dirt cheap.

[1]:
[https://en.wikipedia.org/wiki/Texas_Medical_Center](https://en.wikipedia.org/wiki/Texas_Medical_Center)

~~~
nilkn
I wouldn't say it's dirt cheap. The Medical Center in particular is in a very
wealthy area of Houston and is across the street from Rice and a neighborhood
of $1M+ homes.

The dirt cheap homes are 20 miles out in the suburbs or in very high crime
areas.

~~~
giardini
You're exaggerating greatly. Almost the entire Houston metropolitan area is
less than 20 miles from the Medical center.

Plenty of homes are near the Medical center. Nearly all of Houston is "dirt
cheap" when compared with San Francisco's price bubble.

As for crime, Houston is safer than SF proper and doesn't have San Francisco's
vagrancy problems, which are as much a product of the city fathers as of the
vagrants themselves.

~~~
shiftpgdn
I don't think that's a fair comparison at all. Having been in both places
(currently live in Houston) we have a bad vagrancy problem that has only
recently been addressed due to the superbowl.

Furthermore keep in mind the list price on a house in Houston isn't indicative
of the true cost. There is a 3-5% property tax that is paid out annually. I
currently pay $14,000/yr in property tax against a $320k mortgage. That's
after homesteading discount and disputing the property value appraisal to be
lower than what I actually paid for it.

~~~
velodrome
> I don't think that's a fair comparison at all.

How much income tax do you pay in Texas vs California?

California [1]:

1% on the first $7,850 of taxable income.

2% on taxable income between $7,851 and $18,610.

4% on taxable income between $18,611 and $29,372.

6% on taxable income between $29,373 and $40,773.

8% on taxable income between $40,774 and $51,530.

9.3% on taxable income between $51,531 and $263,222.

10.3% on taxable income between $263,223 and 315,866.

11.3% on taxable income between $315,867 and $526,443.

12.3% on taxable income of $526,444 and above.

Texas [2]: Texas residents pay no personal state income tax.

[1] [http://www.bankrate.com/finance/taxes/state-taxes-
california...](http://www.bankrate.com/finance/taxes/state-taxes-
california.aspx)

[2] [http://www.bankrate.com/finance/taxes/state-taxes-
texas.aspx](http://www.bankrate.com/finance/taxes/state-taxes-texas.aspx)

> There is a 3-5% property tax that is paid out annually. I currently pay
> $14,000/yr in property tax against a $320k mortgage.

Yes, that's high. However, consider what $320k gets you in SF vs Houston. With
$320k I can get a decent sized house in Houston vs a tiny studio in SF (if
that).

One state is not necessarily better than the other. They are making trade
offs. These trade offs benefit you depending on your lifestyle and
circumstances.

------
sheeshkebab
Longer term, outsourced IT costs for larger projects are not lower than having
staff. The cost savings could be in outsourcing infrastructure too, although
the way medical systems are required to be maintained in US it's hard to
imagine they'd move their stuff to AWS, or if they did whether it would be
much cheaper.

Curious to know of real reasons - maybe some internal politics? Or maybe they
had issues with staff skills/retraining?

~~~
ethbro
Not sure if this applies to edu, but here's the way it normally seems to work
in corporate:

Aspiring manager decides to hitch his or her wagon to offshoring IT
initiative. Manager hires consulting firm to handle details / take fall if it
goes poorly. Switch-over normally goes well. Cost savings are demonstrated in
year 1.

Manager gets promotion / bonus because of fine job he or she did. Consulting
firm gets paid because they delivered. Offshore IT appears to be working well.

In year 2, company finds out there's an extremely frequent business
interaction with IT that wasn't covered by the contract (because management
lives in a land of abstracted rather than actual business processes). Offshore
IT bills them an arm and a leg for it. Repeat this for every change request.
Service also seems to degrade as new faces are substituted in on the offshore
side (B team for A team).

In year 3, company needs to migrate to a new business system. Offshore IT
(under current contract) is revealed as utterly incompetent for something this
complex. Offshore IT will happily sign a new contract to make it happen, if
company is willing to pay more.

In year 4, company is still attempting the migration. After signing the
migration contract, offshore assigned more competent resources. However, it is
revealed there is now no one left at the company with deep expertise in the
system (the person who worked on it for 20 years was let go during the
offshoring) to interface with offshore IT experts. And of course nothing was
documented.

In year 5, the migration is still ostensibly underway but has generally been
accepted as failing. The offshore IT initiative is now regarded as a more
expensive boondoggle that delivered worse service.

The manager moved on somewhere around year 3.5, securing a better position
based on his or her track record with successful IT offshoring. Which they are
then asked to do for their new employer.

The consultants are also in strong demand, based on their track record of
successful IT offshoring initiatives. Any problems that occured when they were
no longer involved obviously can't be attributed to them.

Tl;dr - pump and dump with a department of employees and people's lives

~~~
zerkten
This is so very true based on my experiences with pharma. The only addition
I'd make in year 1 is that most of the company is told that everything will be
business as usual. It's not "BAU" because the Offshore IT team brings new
processes and there is often a cultural mismatch. The business teams then
decide to be uncooperative and work as much as possible outside the bounds of
IT for the next 4 years. This makes the environment even more poisonous for
all involved.

------
throw2016
When blue collar workers getting outsourced comments here are usually full of
pontification on capitalism and shareholder interest.

When it comes to service workers some commentators are nearly gleeful at the
prospect of job losses and cost savings by ai never mind it's decades away if
at all.

Individualism can only take you so far. Without meaningful community and
social structures based on common good and mutual respect the lack of empathy
and sometimes open disrespect of other peoples life conditions will ultimately
come back to bite you.

------
douche
Good luck to those losing their jobs, and good luck to the university staff
and students - you're going to need it. HCL is terrible.

~~~
i000
All University IT departments I have interacted with were terrible too.
Universities simply cannot pay market-level salaries for IT staff because it
would turn the whole pay-pyramid upside-down. The ones who stay, spend most of
their time making sure their work is neither cheap nor good: You cannot use
the cloud! but you can have this VMWare virtual from 2009. You need to store
500TB? we don't have it but don't you dare to use S3. To get stuff done you
have to essentially run a shadow IT group. Let's see how the UCSF experiment
turns out.

~~~
curiouscats
They could pay what is justified if they wanted. University pay is usually
topped by sports coaches (and not just head coaches, at many universities
numerous assistant coaches make more than any executives at the school and all
academic staff).

There is no reason IT staff couldn't be paid at market rates. Poor management
of IT is due to poor management not because "Universities simply cannot pay
market-level salaries for IT staff."

~~~
justinv
"University pay is usually topped by sports coaches (and not just head
coaches, at many universities numerous assistant coaches make more than any
executives at the school and all academic staff)."

Coaches & sports staff at the high level you are referring to, are NOT funded
by the university budget. They're funded by specific athletic funds that is
from sports revenue & that boosters pay into.

This is not an equivalent scenario - you're basically saying that a University
should go set up an IT Booster Fund and have interested parties pay into it in
order to pay these market rates - which they wouldn't (would you? I sure
wouldn't).

"The other problem with the salary comparison is that Alabama taxpayers aren't
paying Mr. Saban, and so his salary doesn't take any money away from
professors. One of the benefits to come out of the rampant commercialism of
college athletics is that media conglomerates and sneaker companies are
willing to pay huge sums for the broadcast and apparel rights. Thus, Mr. Saban
will be paid out of Alabama's $70 million athletic budget, with little or no
impact on academic departments."[0]

[0]
[http://web.archive.org/web/20160325043141/http://www.wsj.com...](http://web.archive.org/web/20160325043141/http://www.wsj.com/articles/SB122853304793584959)

~~~
emj
But who pays for the infrastructure of the sports, from what I've seen of
stadium and amenities investments it's almost always the public that pays for
that, and in that case the state does pay a lot to the athletics funds. One
have to be real careful when thinking that the abstract budgets are not
related.

------
m23khan
Yesterday when it came to outsourcing of jobs, Trump only said 'China',
'China', 'China'.

I don't know what magical spell has India cast over Americans that all
American politicians have become totally stone blind to the fact that how
damaging India has been to outsourcing of jobs from America to India and how
many highly skilled/educated Americans have been left without jobs due to
India's usurping of jobs.

And to those bleeding hearts who highlight scarce attempts of Indian companies
hiring in US - don't forget the fact that such job numbers dwarf the amount of
jobs that have been outsourced to India. And for those karma-believers who
think that one day India will taste its own medicine when they outsource to
poorer nations than India - let me tell you something: India is one nation
that will never,ever outsource its own jobs to other nations (mickey mouse
examples won't count).

How the heck can IT folks from US/Canada/UK and other such nations compete
with India (and in some cases with Philippines) where wages are so low that if
we here in the Western World were to work with such wages, we would need to
have 3 jobs to make our ends meet.

~~~
virtuabhi
"I don't know what magical spell has India cast over Americans"

This is a common question esp. among Pakistanis ("m23khan" is someone from
Pakistan living in Canada, available from his HN comments). Please let me
explain. (1) India is the biggest democracy in the world. US is the oldest
democracy. We share common values like liberty, equality, secularism. (2)
India has the potential to be largest growth market for American companies
(think Android, Uber, American defense companies, etc.). (3) No Indian has
been involved in terrorism attacks in US. (4) Indians integrate in US much
faster than other immigrant communities, reasons could be familiarity with
English, belief in freedom of speech, etc. (5) Significant contributions made
by Indian-Americans - look at their work as Professors, as doctors, as CEOs,
as journalists. (6) In spite of sharing many values with US, India is not
afraid to distance itself from American policies when they do not agree, e.g.
India said no for troops in Iraq, led the non-aligned movement during Cold
War. My guess is that America respects a principled country more than a
country which keeps asking for more $ while pointing a gun to its own head.

So it should not be difficult to understand why India is considered as an ally
by US.

~~~
AstralStorm
It is more likely that India can be invaded if all goes wrong, but China would
easily withstand US military nowadays.

In other words, Chinese negotiate from the position of strength in all
regards. And they do want to keep control of their economy and their internal
market.

~~~
fellellor
What is this? Civilization 2 or something. HN too is subject to such juvenile
commentary like Reddit, I suppose.

------
a3n
Hopefully that school doesn't have a CS or IT program, 'cause that's a pretty
strong wave-off for people considering what career to go for.

------
aphextron
Quote from UCSF "... I.T. costs have nearly tripled between 2011 and 2015"

This is the real story. The ballooning salaries and cost of living in San
Francisco from the tech boom has completely blown UC's budget out of
proportion.

These people are not downtrodden factory workers in some midwestern town
losing their livelihoods. They are highly qualified IT workers in the hottest
job market that has ever existed anywhere. They will all have job offers in
weeks.

------
koolba
What's the work involved in these jobs?

If it's being done remotely it can't be any physical maintenance as that'd
require being on site.

~~~
redm
Just because the company is based in India doesn't mean all the staff is.
There is probably "remote hands" or light network engineering on site with the
bulk administration being done remotely.

------
smdz
> "It's a downgrading of services and a slap in the face for the customers,"
> said Ho

I'd express my sympathy - but these statements tend to be incorrect and said
out of frustration. Infact, there is a higher probability for improvement in
service and customer experience - provided it is maintenance work and the
control point decisions are not outsourced. However, if customer-experience
depends on cultural experience - the story could be different. And in this
case HCL is a reputed organization (not too different from the likes of TCS,
Infosys)

> as a way to save $30 million over five years.

Doesn't happen and/or highly unlikely to occur. What happens is: They start
saving initially. After some time their costs start rising, but they are still
saving. In parallel, the company (to whom they outsourced) starts cross-
selling. This new expense doesn't affect the savings figure - afterall they
are spending on "something new". Well this "something new" costs higher.
Slowly - outsourcers start outsourcing decision making (and sometimes managers
get themselves fired). And then the tables turn over. Later the outsourcer is
so much dependent that its hard and costly to take jobs back in, because it
requires a business-system overhaul. And the company would make sure (by
resolving some pain points) that you are not firing them and keep tolerating
them. Nothing specific to India here, it happens with Indian consulting cos
and with US-based consulting cos. The only difference is that the latter
provides _slightly_ better quality at a 50-80% higher cost.

------
averagewall
A lot of criticism of how bad it will be with the outsourcing company, but
clearly the real worry is local people losing their jobs to foreigners. Why
blame the university? It's not a charity. If anyone really cares about the
workers who lost their jobs, they can look up their address and mail them a
check.

~~~
sbarker
Seems like you may have missed the whole, "Give a man a fish..." thing growing
up.

~~~
shiven
Not GP, but there is a sliver of sound logic in the call to put your money
where your mouth is.

Why not start a charity/non-profit that assists such victims of outsourcing?
I'd think unemployment benefits were supposed to do that. And that is not too
far from you, me and all other taxpayers writing a check to such folks. Is it?

~~~
cableshaft
Not the GP, but because starting a charity/non-profit that's worth a damn
takes a ridiculous amount of work, and in areas I'm not terribly proficient
in, and I have a plethora of other things that I would like to do with my
limited time on earth.

I already have about 100+ things I'd love to create, contribute to, or
accomplish, if only I had the time and money to do so. I do what I can, but
that list just keeps growing, not shrinking.

------
known
Hidden secret is [http://business.rediff.com/report/2009/sep/24/indians-
among-...](http://business.rediff.com/report/2009/sep/24/indians-among-most-
corrupt-while-doing-business-abroad.htm)

~~~
AstralStorm
Open secret you mean.

------
KKKKkkkk1
I think it's deceptive to frame this as Indians stealing American jobs. It's
more like American engineers are being overpaid at the expense of UCSF
patients and CA taxpayers.

~~~
ythn
American engineers are being overpaid, or Indian engineers are being
underpaid?

~~~
KKKKkkkk1
I think this question should be discussed alongside the question of why US
healthcare is so expensive and inefficient compared to the rest of the world.

~~~
dominotw
because we don't do the same thing that we do in IT like importing doctors,
meds ect.

------
thewhitetulip
Why isn't anyone talking about the lack of funding for universities and
educational institutes? Isn't that too a part of the problem?

Or is there no lack of funding?

------
sambull
The goal is opex obviously.

------
known
Try hiring Politicians on H1B

