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ACS Joins Others in Sending 'More Complex' Jobs Offshore

Ann All

Back in May, I wrote about a CareerBuilder.com/Wharton 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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