ACS Joins Others in Sending 'More Complex' Jobs Offshore

Ann All

Back in May, I wrote about a School study in which 28 percent of U.S. companies said they were offshoring an increasing number of high-wage, high-skills jobs.


ACS, one of the "Big Six" North American outsourcing specialists, is among those ranks, reports Computerworld. During a call discussing its most recent financial results, ACS said it planned this year to increase the number of employees working offshore by 4,200. That includes "more complex, higher paying jobs," said CEO Lynn Blodgett during the call.


Like other services providers, including Accenture and IBM, ACS has been moving more jobs offshore over the past few years. In its 2006 fiscal year, slightly less than 25 percent of the ACS workforce was based outside the U.S. But that number has grown to nearly 35 percent, according to Computerworld. Said Tom Burlin, the company's COO:

We've done a great job in moving base production-level jobs offshore but have decided to aggressively move more of our higher-level jobs, like production managers, higher-level back-office functions and higher-level development roles, to lower-cost locations.

Offshoring these positions will yield cost savings that ACS plans to invest in key areas such as sales and new product development, said Burlin, who called the move "the right thing to do and the right time to do it."


Though a company spokesman said it isn't yet known whether moving such positions offshore will result in layoffs in the U.S., a slide presented during the call indicates that ACS is estimating $38 million to $42 million in "severance/transition transition" expenses as a result of increases in offshoring, with as much as $25 million of that amount expected to come during the company's second fiscal quarter.


Providing further evidence that more companies are sending more sophisticated tasks offshore, the article mentions that Pfizer is reportedly training foreign workers at two facilities in Connecticut. Last December, I wrote about Pfizer's plans to move more of its research and development activities to China, India, Japan and South Korea and to double the amount of manufacturing it outsources, part of a broader trend in the pharma industry.


Though cost savings is one reason for moving higher-level positions offshore, many companies are also interested in establishing closer ties to emerging economies like China and India, which will account for a growing percentage of global purchasing power. Cisco, for instance, has establisheda Globalization Centre East in Bangalore, where one-fifth of its global executives will be based by 2012. It has also opened regional training centers in Johannesburg and Amman, Jordan, and plans to add centers in India and China by the end of 2008. And as IT Business Edge blogger Rob Enderle wrote, Dell is making huge investments in the Asia-Pacific region.

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Nov 7, 2008 2:16 AM John Doe John Doe  says:
Offshoring these positions will yield cost savings that ACS plans to invest in key areas such as sales and new product development, said Burlin, who called the move the right thing to do and the right time to do it.THE RIGHT THING TO DO?????????????????WTF?????????They plan to invest it right in their pocket. Reply
Nov 7, 2008 6:09 AM Jane Doe Jane Doe  says:
With all of the people unemployed during such an economic crisis in this country, you really think it's the right thing to do? Taking all the jobs away from americans who have worked so hard and leave them jobless with the potential of losing more homes to foreclosure. Yes lets hand these jobs over to incompetant, untrained and untrainable people located overseas (I have seen this happen so many times already and it just fails). Yes that makes so much sense - - TO GREEDY CORPORATE AMERICA! Reply
Nov 10, 2008 1:53 AM Thoma Thoma  says:
This trend is short-sighted and damaging in the long run as it sends strategic assets abroad at the risk of loosing the technological edge that makes the value of the Westren world.They should rather be working on improving on their own process onshore and keeping the technological and management advantages that they have earned.Unrestrained offshoring is part of the current economoical meltdown we are experiencing. Greed! Greed! Greed´┐Ż and no strategic vision Reply
Nov 10, 2008 2:43 AM Frits Bos Frits Bos  says:
So Ms. Blunt-shed finds that it is the right time to trash her "subordinates" because the company lacks the competency to manage its affairs properly. While the option for outsourcing should always be open it should never be used in such an incompetent manner that the on-shore operation becomes relegated to a mere branch office status while all operational decisions are made off--shore and the on-shore knowledge base is decimated.Why not hand the company lock-stock-and-barrell to a ready and eager foreign competitor who will end up in a position to replace the client in the outsourcing deal? It is bad enough for the Executive suite to show extreme greed: to show such incredible stupidity while they are supposed to look after the interest of shareholders is in my honest opinion a criminal liability worthy of further audits by the SEC. Is anyone home?Ms. Blunt-shed is what Corporate America has come to, a vacant air-head that embodies incompetence and uses power to bend business her way until there is nothing left to fleece. The worst part of this is that if there were an investigation, and she testified that she had no idea, we already know she spoke the truth. Reply
Nov 11, 2008 11:09 AM Paul Shearer Paul Shearer  says:
The decision to outsource is being driven by the American consumer. Every time you got a Wal-Mart and purchase a product two dollars cheaper made in China you have just voted with their dollars in support of outsourcing. American corporations are simply going along with the American public's decision. Their choice is simple... outsource a potion of their labor offshore or go out of business. It's no real surprise corporations choose the latter.I manage IT teams both in the US and in KL, Malaysia. Anyone who talks down about the technical skills of these foreign workers is basically showing the closed mindedness. My team in Malaysia are some of the best performers in my entire group. They are reliable, dedicated, and extremely ingenious. Obviously the biggest issue to overcome article for all and language barriers but I readily admit their English skills are far superior to my Mandarin Chinese.The key to surviving in this new economy is not to fight outsourcing but embrace it. Figure out how you can leverage this cheap, offshore labor to make yourself scale better. Be the public face to your clients and then use offshore talent to scale across as many clients as possible. At least that's my strategy... Reply
Nov 13, 2008 2:37 AM Patrick Patrick  says:
Right for who? Are they going to lower the pricing they charge to customers since there saving all this money don't think so. ACS bought the company I was working for and it did not take long for them to close it to save money but they increase the price structure to the customers.When CEO's job get offshore then they will run to Washington say this is unfair to them. Reply
Nov 19, 2008 3:01 AM Jonathon Dowe Jonathon Dowe  says:
Paul, You sound like the idiots that run ACS. This is the stupidest thing I have ever heard of. Have you or any of the top executives of all these big US companies looked around at our unemployment rate? Every empire since conception has fallen and this is the beginning of the fall for the US. Lets take all of our companies, and all the employees and move the to another country? What a concept. It took great minds to figure that out, or maybe it is just the 20,000,00 dollar paychecks. And all the biggest US Corporations are helping to make this happen. At ACS only the employees, and Americans looking for jobs are losing their jobs, no management. Hopefully you and the rest of the top management in your compay will get outsourced. When that happens, let me know how you feel about it. Have a nice day. Reply
Jan 7, 2009 2:55 AM John Doe John Doe  says:
Paul is an idiot who works for ACS. Reply

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