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    A run came to the United States from India on an H-1B visa to take
    advantage of the hot and booming high-tech economy. His American employer
    had asked the government to let the engineer work here at a time when there
    wasn't enough local talent to meet its labor needs.

    Jack Reed is an Oakland resident and software programmer who once pulled
    down $120 an hour as an independent contractor. Today he sustains himself
    with his woodworking business ( www.woodenfaces.com , handbuilding
    mannequins for retailers. With the retail market slowing, he is hoping to
    build and repair acoustic guitars.

    Following a trend over the last two years, Arun's U.S. employer laid him
    off six months ago. Arun, who asked that his real name not be used and
    would not divulge his former employer's name, got a tourist visa to buy
    some time while he searched for a new job.

    Reed, a Database C and Visual Basic programmer, said he used to get "two to
    three calls a week offering me new positions, and now I get one or two a
    month."

    Reed has been out of work for almost a year, despite acquiring new skills.

    Both men have been caught in the cross-currents of a huge shift in the
    high-tech industry's work force worldwide, and particularly in the Bay
    Area, since the onset of the recession.

    While the dot-com collapse led to massive layoffs and ended the high-tech
    worker shortage that initially produced the influx of foreign workers, many
    companies continue to pursue foreign workers -- but with a different objective.

    Now, instead of going outside their own work forces to beef up
    productivity, local employers are doing so to cut costs. And there appears
    to be less reliance on importing workers and more a focus on outsourcing
    jobs through foreign intermediaries or by expanding a company's foreign
    operations.

    Arun worked for a company, one of many that have found cheaper,
    underemployed labor pools in India and other lesser developed countries.

    High-tech jobs in the Bay Area grew to 570,000 in 2000 from 468,000 in
    1997, according to Pradeen Maddan, principal consultant for management
    consultants A.T. Kearney. In July 2001, that peak had fallen dramatically
    to 510,000. Since then "it's gone down further but not as dramatically,"
    Maddan said.

    The influx of foreign workers also appears to have slowed. In July, the
    Immigration and Naturalization Service announced that 60,500 individuals
    were approved for H-1B status in the first three quarters of fiscal year
    2002, compared to 130,700 approvals over the same period the previous year.
    The reasons for this are complicated, but clearly new entrants are fewer.

    Two years ago, the local high-tech industry couldn't find help fast enough.
    Segments like research and development, chip-making, programming,
    information technology systems, help desks for customer service and Web
    development all were scrambling for talent.

    Firms facing high demand for labor struggled to meet this gap by
    outsourcing work to other firms both domestically and abroad, or by
    establishing or expanding foreign facilities. They even put the U.S.
    government under pressure to bring in guest workers like Arun to fill that
    need by expanding the H-1B visa program.

    "They were trying to re-establish their flexibility," said Cynthia Kroll,
    senior regional economist at the Fisher Center for Real Estate and Urban
    Economics at the University of California, Berkeley's Haas School of Business.

    During the period of high demand, some countervailing voices criticized the
    giant high-tech companies for not using all the people here, not making use
    of older workers or retraining workers, and instead going for the
    lower-cost foreign pool.

    "That debate was drowned out by the pace at which things were going," Kroll
    said.

    After two years of downward employment, local firms have started to do an
    about face, but in many cases the new jobs are being created in other
    countries.

    The online newsletter Silicon Valley Internet (
    www.siliconvalley.Internet.com reported that American technology companies
    have contributed over $10 billion to the Indian economy over recent years
    in jobs and foreign investment.

    In September, India's minister for information technology, Pramod Mahajan,
    announced chip-maker Intel will invest $130 million in that country and
    increase staff to 3,000 workers, from the current 900, over the next five
    years.

    Intel spokeswoman Gail Dundas would not comment on this, but she said,
    "Certainly there's investment in other countries but not at cost of local
    jobs."

    Worldwide, Intel reduced its over 83,000-strong workforce by 4,000 this
    year after already having laid off 5,000 in 2001. The chip maker
    accomplished this by retraining and redeploying people or by offering them
    voluntary separation packages.

    Oracle Corp., which has development centers in Bangalore and Hyderabad,
    plans to enlarge its Bangalore facilities. It will add 1,800 new jobs over
    the next few years, bringing its Indian roster to more than 4,000.

    India West reported in August that Oracle will nearly double its staff in
    India in the next four years to 4,000, while it is cutting back 200 and
    eventually 600 positions locally. Oracle would not comment on this.

    Recently the job board Monster.com conducted a survey asking respondents --
    presumably all of whom are looking for jobs -- whether the U.S. should
    increase or decrease the number of work visas for foreign workers.
    Eighty-one percent said "decrease."

    But the survey's very question framed the problem as an "us versus them"
    argument rather than the complex mosaic it is. What is frequently lost in
    comprehending this situation is that we're looking at global trends. The
    Bay Area's problems are a reflection of what is happening throughout the
    planet.

    Kailash Joshi is chairman of the Silicon Valley branch of The IndUS
    Entrepreneurs, a nonprofit group that supports entrepreneurship especially,
    but not exclusively, among those who hail from the Indus Valley. He gets
    testy at the intimation that India is gaining at the expense of local jobs.
    It's all part of a trend of manufacturing shifting from developed to lesser
    developed countries, he said.

    "India has created a big advantage in software and hardware. The same thing
    happened 30 years ago when TVs and computer manufacturing migrated to
    Taiwan, Korea and mainland China," Joshi said.

    Ireland, Israel, South Africa, Russia and Siberia also are drawing
    high-tech jobs away from the U.S. as effectively as a sieve drains water
    from freshly cooked pasta. All have educated work forces with proven
    English-language skills and labor costs that are lower than in the United
    States.

    Meanwhile, the number of companies that were expanding in the East Bay and
    South Bay have retracted or shelved those plans. Cisco Systems, for one,
    was planning a major expansion in San Jose that has been delayed.

    One local company that is benefiting is neoIT. Based in San Ramon, neoIT's
    business is helping local companies outsource their work offshore. They've
    recently hit 5,000 clients for whom they find suppliers in India, Ireland,
    Israel, the Philippines, Vietnam, China, Poland, South Africa and Russia --
    with more than 500,000 skilled workers.

    "Our business is still strong. The reasons for outsourcing and using
    sourcing technology have definitely changed. Faster time to market used to
    be a major consideration. Now companies are looking first at how to reduce
    costs and capital expenditures," said Atul Vashistha, neoIT's cofounder and
    chief executive officer.

    While the need to cut costs is overwhelming, there's another attraction to
    look beyond our borders, according to economist Kroll. A company locating
    an installation or using a work force in a less developed country is
    looking long-range to the day that country becomes a marketplace as well.

    "It's an advantage to have a labor force located near markets," she said.

    But the local situation is not all bleak. A.T. Kearney's Maddan said
    Silicon Valley will not be completely bereft of its brainiest.

    "The really high-end knowledge jobs in product design, research and
    development -- what Silicon Valley is known for, the development of new
    technology -- the kind of people you need with Master's degrees, Ph.D.s,
    post docs, those jobs will be here," he said. The scientists devoted to
    nanotechnology, biotechnology, proteonomics and life sciences will continue
    to innovate here.

    Meanwhile the lesser developed economies are basically getting ready for
    next wave of tech jobs where they can continue "IT-enabled services" --
    that is, support and administrative work, Web site development, call
    centers, lower-end programming and maintenance of software programs that
    are already written.

    Maddan said these jobs are already migrating abroad, jobs that need basic
    computer and English language skills. Already, customer support staffs in
    Asia are answering customers' questions about their e-commerce orders.

    Robert Half Technology recently predicted that there will be an increase in
    IT hiring in the Pacific states during the last quarter of this year.
    "Technology executives are hiring conservatively, keeping many projects on
    hold, pending more definitive signs of economic recovery," according to
    Katherine Spencer Lee, the consultancy's executive director. Robert Half
    predicted health care and biotechnology will be looking for those skilled
    in Enterprise Java and .NET development.

    But this is a tiny segment of the palette we call high-technology and not
    all agree with Robert Half's assessment.

    In the meantime, high-tech companies will keep the global focus in
    long-term plans and "continue to look at parts of world where they want to
    be, such as China, as both having low-cost labor forces and potential for
    growth and demand," Kroll said.

    And in the U.S., displaced workers like Arun and Reed will have had to roll
    with the punches.

    Arun didn't want to leave the U.S. and return to India, which also has seen
    a dip in the job market for skilled workers in the electronics industry. So
    he "got a B2 tourist visa to buy me some time and I just found a job with
    non-profit. So I will go through the process of (applying for an) H-1B visa
    all over again," he said. It's not what he wanted, but he feels lucky.

    Reed has had recent offers for jobs, but they do not conform to his skills
    or his need to remain in the Bay Area. With the job market the way it is,
    Reed thinks he'll be tinkering in his woodworking shop with fret boards for
    sometime to come.

    Leave a comment:


  • Guest's Avatar
    Guest started a topic Workers caught in cross-currents of huge high-tech industry shift.

    Workers caught in cross-currents of huge high-tech industry shift.

    A run came to the United States from India on an H-1B visa to take
    advantage of the hot and booming high-tech economy. His American employer
    had asked the government to let the engineer work here at a time when there
    wasn't enough local talent to meet its labor needs.

    Jack Reed is an Oakland resident and software programmer who once pulled
    down $120 an hour as an independent contractor. Today he sustains himself
    with his woodworking business ( www.woodenfaces.com , handbuilding
    mannequins for retailers. With the retail market slowing, he is hoping to
    build and repair acoustic guitars.

    Following a trend over the last two years, Arun's U.S. employer laid him
    off six months ago. Arun, who asked that his real name not be used and
    would not divulge his former employer's name, got a tourist visa to buy
    some time while he searched for a new job.

    Reed, a Database C and Visual Basic programmer, said he used to get "two to
    three calls a week offering me new positions, and now I get one or two a
    month."

    Reed has been out of work for almost a year, despite acquiring new skills.

    Both men have been caught in the cross-currents of a huge shift in the
    high-tech industry's work force worldwide, and particularly in the Bay
    Area, since the onset of the recession.

    While the dot-com collapse led to massive layoffs and ended the high-tech
    worker shortage that initially produced the influx of foreign workers, many
    companies continue to pursue foreign workers -- but with a different objective.

    Now, instead of going outside their own work forces to beef up
    productivity, local employers are doing so to cut costs. And there appears
    to be less reliance on importing workers and more a focus on outsourcing
    jobs through foreign intermediaries or by expanding a company's foreign
    operations.

    Arun worked for a company, one of many that have found cheaper,
    underemployed labor pools in India and other lesser developed countries.

    High-tech jobs in the Bay Area grew to 570,000 in 2000 from 468,000 in
    1997, according to Pradeen Maddan, principal consultant for management
    consultants A.T. Kearney. In July 2001, that peak had fallen dramatically
    to 510,000. Since then "it's gone down further but not as dramatically,"
    Maddan said.

    The influx of foreign workers also appears to have slowed. In July, the
    Immigration and Naturalization Service announced that 60,500 individuals
    were approved for H-1B status in the first three quarters of fiscal year
    2002, compared to 130,700 approvals over the same period the previous year.
    The reasons for this are complicated, but clearly new entrants are fewer.

    Two years ago, the local high-tech industry couldn't find help fast enough.
    Segments like research and development, chip-making, programming,
    information technology systems, help desks for customer service and Web
    development all were scrambling for talent.

    Firms facing high demand for labor struggled to meet this gap by
    outsourcing work to other firms both domestically and abroad, or by
    establishing or expanding foreign facilities. They even put the U.S.
    government under pressure to bring in guest workers like Arun to fill that
    need by expanding the H-1B visa program.

    "They were trying to re-establish their flexibility," said Cynthia Kroll,
    senior regional economist at the Fisher Center for Real Estate and Urban
    Economics at the University of California, Berkeley's Haas School of Business.

    During the period of high demand, some countervailing voices criticized the
    giant high-tech companies for not using all the people here, not making use
    of older workers or retraining workers, and instead going for the
    lower-cost foreign pool.

    "That debate was drowned out by the pace at which things were going," Kroll
    said.

    After two years of downward employment, local firms have started to do an
    about face, but in many cases the new jobs are being created in other
    countries.

    The online newsletter Silicon Valley Internet (
    www.siliconvalley.Internet.com reported that American technology companies
    have contributed over $10 billion to the Indian economy over recent years
    in jobs and foreign investment.

    In September, India's minister for information technology, Pramod Mahajan,
    announced chip-maker Intel will invest $130 million in that country and
    increase staff to 3,000 workers, from the current 900, over the next five
    years.

    Intel spokeswoman Gail Dundas would not comment on this, but she said,
    "Certainly there's investment in other countries but not at cost of local
    jobs."

    Worldwide, Intel reduced its over 83,000-strong workforce by 4,000 this
    year after already having laid off 5,000 in 2001. The chip maker
    accomplished this by retraining and redeploying people or by offering them
    voluntary separation packages.

    Oracle Corp., which has development centers in Bangalore and Hyderabad,
    plans to enlarge its Bangalore facilities. It will add 1,800 new jobs over
    the next few years, bringing its Indian roster to more than 4,000.

    India West reported in August that Oracle will nearly double its staff in
    India in the next four years to 4,000, while it is cutting back 200 and
    eventually 600 positions locally. Oracle would not comment on this.

    Recently the job board Monster.com conducted a survey asking respondents --
    presumably all of whom are looking for jobs -- whether the U.S. should
    increase or decrease the number of work visas for foreign workers.
    Eighty-one percent said "decrease."

    But the survey's very question framed the problem as an "us versus them"
    argument rather than the complex mosaic it is. What is frequently lost in
    comprehending this situation is that we're looking at global trends. The
    Bay Area's problems are a reflection of what is happening throughout the
    planet.

    Kailash Joshi is chairman of the Silicon Valley branch of The IndUS
    Entrepreneurs, a nonprofit group that supports entrepreneurship especially,
    but not exclusively, among those who hail from the Indus Valley. He gets
    testy at the intimation that India is gaining at the expense of local jobs.
    It's all part of a trend of manufacturing shifting from developed to lesser
    developed countries, he said.

    "India has created a big advantage in software and hardware. The same thing
    happened 30 years ago when TVs and computer manufacturing migrated to
    Taiwan, Korea and mainland China," Joshi said.

    Ireland, Israel, South Africa, Russia and Siberia also are drawing
    high-tech jobs away from the U.S. as effectively as a sieve drains water
    from freshly cooked pasta. All have educated work forces with proven
    English-language skills and labor costs that are lower than in the United
    States.

    Meanwhile, the number of companies that were expanding in the East Bay and
    South Bay have retracted or shelved those plans. Cisco Systems, for one,
    was planning a major expansion in San Jose that has been delayed.

    One local company that is benefiting is neoIT. Based in San Ramon, neoIT's
    business is helping local companies outsource their work offshore. They've
    recently hit 5,000 clients for whom they find suppliers in India, Ireland,
    Israel, the Philippines, Vietnam, China, Poland, South Africa and Russia --
    with more than 500,000 skilled workers.

    "Our business is still strong. The reasons for outsourcing and using
    sourcing technology have definitely changed. Faster time to market used to
    be a major consideration. Now companies are looking first at how to reduce
    costs and capital expenditures," said Atul Vashistha, neoIT's cofounder and
    chief executive officer.

    While the need to cut costs is overwhelming, there's another attraction to
    look beyond our borders, according to economist Kroll. A company locating
    an installation or using a work force in a less developed country is
    looking long-range to the day that country becomes a marketplace as well.

    "It's an advantage to have a labor force located near markets," she said.

    But the local situation is not all bleak. A.T. Kearney's Maddan said
    Silicon Valley will not be completely bereft of its brainiest.

    "The really high-end knowledge jobs in product design, research and
    development -- what Silicon Valley is known for, the development of new
    technology -- the kind of people you need with Master's degrees, Ph.D.s,
    post docs, those jobs will be here," he said. The scientists devoted to
    nanotechnology, biotechnology, proteonomics and life sciences will continue
    to innovate here.

    Meanwhile the lesser developed economies are basically getting ready for
    next wave of tech jobs where they can continue "IT-enabled services" --
    that is, support and administrative work, Web site development, call
    centers, lower-end programming and maintenance of software programs that
    are already written.

    Maddan said these jobs are already migrating abroad, jobs that need basic
    computer and English language skills. Already, customer support staffs in
    Asia are answering customers' questions about their e-commerce orders.

    Robert Half Technology recently predicted that there will be an increase in
    IT hiring in the Pacific states during the last quarter of this year.
    "Technology executives are hiring conservatively, keeping many projects on
    hold, pending more definitive signs of economic recovery," according to
    Katherine Spencer Lee, the consultancy's executive director. Robert Half
    predicted health care and biotechnology will be looking for those skilled
    in Enterprise Java and .NET development.

    But this is a tiny segment of the palette we call high-technology and not
    all agree with Robert Half's assessment.

    In the meantime, high-tech companies will keep the global focus in
    long-term plans and "continue to look at parts of world where they want to
    be, such as China, as both having low-cost labor forces and potential for
    growth and demand," Kroll said.

    And in the U.S., displaced workers like Arun and Reed will have had to roll
    with the punches.

    Arun didn't want to leave the U.S. and return to India, which also has seen
    a dip in the job market for skilled workers in the electronics industry. So
    he "got a B2 tourist visa to buy me some time and I just found a job with
    non-profit. So I will go through the process of (applying for an) H-1B visa
    all over again," he said. It's not what he wanted, but he feels lucky.

    Reed has had recent offers for jobs, but they do not conform to his skills
    or his need to remain in the Bay Area. With the job market the way it is,
    Reed thinks he'll be tinkering in his woodworking shop with fret boards for
    sometime to come.
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