Apple Pulls Out of India 696
tanveer1979 writes "Barely 3 months after it commenced India operations, Apple has decided to pull out its software operations from Bangalore. The employees will be given a severance package which is equal to two months' pay. The sales and marketing operations will remain on (these consist of around 30 people) but the software and support will be completely pulled out." From the article: "Apple had set itself a hiring target of 600 by the year-end. After a gala induction ceremony on April 17, the operations team went to Transworks for training. Some of the managers were about to leave for the US for further training when they were asked to stay put."
we were wondering too (Score:4, Insightful)
Last paragraph of the article, from an India employee losing his (or her) job:
Yeah, there are a lot of U.S. employees familiar with that feeling. Welcome to the global market.
Personally, I find it just as offensive companies whimsically shift work forces, often at high personal and financial cost to employees caught unawares, whether it be in the U.S. or India. I'd like to say, "see how it feels?", but I find no satisfaction in that. I guess the global economy does apply globally. It really does become about money on ledger sheets, and little about the workforce and impact on people just trying to make a living. Meanwhile CEOs and other execs reap massive rewards, usually with little relationship to how well their company does because of these decisions.
(That said, the article is far too short on detail to understand exactly what prompted and triggered the change in plans for Apple.)
Re:we were wondering too (Score:5, Insightful)
Re:we were wondering too (Score:3, Insightful)
Sounds pretty harsh to me (Score:5, Insightful)
"On May 15, Apple officials addressed us and were highly appreciative of the workforce and the task it would execute in India. I wonder why they never said anything even then," said another fired employee.
Seems pretty cold to me. In a lot of developing countries like this a job at a major multinational serves to support not just the family but the entire extended family. No doubt some of these people even had to quit other jobs to join Apple, and can't return. I worked many years for the international division of a large multinational and saw first-hand the culture of abusing foreign workers because management knew they could work them 14 hours a day and the people couldn't say or do anything about it. And since these people are all classified as "professionals" no one can swoop into the factory to blow the whistle, you have to work whatever overtime is demanded of you, for free. Pretty crummy if you ask me.
It's harder than you might think (Score:3, Insightful)
Maybe they realized they made a mistake. (Score:5, Insightful)
It wasn't cost, so was it quality? (Score:5, Insightful)
Sadly I bet Apple found... (Score:5, Insightful)
Re:They were out sourced (Score:5, Insightful)
Given Apple's history with outsourced phone groups (burned by SEI's horrible quality and retention in the mid-90s), I sincerely doubt it.
Apple probably saw that this approach wouldn't meet their quality goals. That's not a slam on Indians or outsourcing, but AppleCare and Apple in general is extremely sensitive to quality and customer satisfaction. 1995-1997 is still very fresh in their minds.
Apple - for the win. (Score:3, Insightful)
I don't know which, maybe an Intel Mini, maybe an iPod - but something.
Good job Apple.
Re:Irony (Score:1, Insightful)
Re:Buzzword (Score:1, Insightful)
Not funnier than snakes on a plane, but still pretty damn funny (and there's not a god damn think you can do about it.)
Re:we were wondering too (Score:3, Insightful)
Re:we were wondering too (Score:5, Insightful)
Of course wage convergence isn't a bad thing- so long as it converges up, increasing the standard of living in the third world while not hitting the first too badly. It doesn't seem to be going that way though.
Socialism??? (Score:5, Insightful)
Actually most of the European policital forces usually mislabeled as 'Socialists' or even 'Communists' by US right wingers are actually modern Social Democrats who have become moderate to the point where they generally do not see a conflict between a democratic society with a capitalist market economy and their own goals which in turn means they have very little in common with Marxism, Communism or classical Socialism. To call political parties like the British labor party or even the German PDS/Linkspartei Socialists would actually be considered an insult by a true die-hard Socialist.
Re:$40 (Score:3, Insightful)
I have run across a good number of ... (Score:5, Insightful)
I know our last 2 contractors had to go through a two week trial period at the agencies expense and we kicked both of them back. We probably get just as many bad American contractors, but the whole point of exporting jobs or importing workers was that we gain talents that aren't available here at a lower price. If their skills and education are all suspect and have to be verified at a greater expense and difficulty than local talent why bother? Apple probably found the same thing.
Re:Payback's a bitch (Score:5, Insightful)
There is absolutely nothing that entitles you to get a tech job. The Indians can do the same job you do at a much lower cost. I know if I was your boss, I would probably say something like... "Thank god the racist prick is out on the street where he belongs."
So now objecting to my job moving overseas is racist? I don't care what race the guy who's doing my job is. I'm opposed to sending the job where I can't follow.
Re:It wasn't cost, so was it quality? (Score:2, Insightful)
Re:we were wondering too (Score:3, Insightful)
No problems.
Back on topic, it should be no surprise that Indian wages are on the rise. While there are a billion people not all of them are qualified to take every job.
Take tech support. If you are answering phones, you can't be merely functional in English you must be completely fluent and familiar with the culture, the idiomatic expressions, and, now, even adopt the American accent. The low hanging fruit has been picked. If you want talented people in India, the word is out, you got to pay more...or you have to in turn outsource to poorer countries.
--Joey
Re:I have run across a good number of ... (Score:1, Insightful)
Yeah, that's probably what happened. You've not jumping to an incredibly wild conclusion or anything...
reading comprehension - massive rewards (Score:5, Insightful)
Mr Jobs just sold $295,000,000 worth of Apple stock.
In 1992, CEOs held 2 percent of the stock of US corporations, nowadays they own 12 percent. In less than 15 years, CEOs (not including other executives, just CEOs), have 'earned' themselves 10 whole percent of corporate America. If the division of pay were entirely fair and equitable, Steve Jobs and his fellow CEOs must be responsible for exactly one tenth of all the wealth created by anyone at all who works for a large corporation.
Not surprising (Score:2, Insightful)
Re:we were wondering too (Score:2, Insightful)
With very few exceptions, if you're pulling down $120k/year and one house payment away from the street, you've made some really, really stupid choices. That's plenty of cash to build a solid financial foundation. What's crazy is the fools who piss it away on piles and piles of crap they don't need, instead of being reasonable.
Re:Payback's a bitch (Score:5, Insightful)
Re:we were wondering too (Score:5, Insightful)
AIK
Re:we were wondering too (Score:1, Insightful)
Re:I have run across a good number of ... (Score:1, Insightful)
Re:Payback's a bitch (Score:5, Insightful)
Well, AC, you know what? In today's global marketplace, nothing entitles you to keep your tech job for longer than three months if your corporate benefactors have a mood swing. Welcome to the party, glad you're here, let me take your coat.
Last number of years, Americans working in tech have had the blade of Indian outsourcing dangled over their heads, customarily as blackmail to force longer hours on fixed salaries. When there's just no more blood to be squeezed from the stone, boom, time to pack up, lay off and ship.
Meanwhile - and I'm saying this from experience working for a large American telecom that fired damned near everybody a few years ago to restock with cheap Indian labor - the Indians coming in would take all this as a show of cultural and intellectual superiority over us pampered, lazy Americans. Not all Indians, but certainly more than enough to carry the stereotype. We Americans have spent the last five years being barely tolerated by Indian coworkers touting the "get used to it, global economy, cheaper and better" dogma.
Now suddenly you're starting to sound like union men! Think it's shitty that Apple changed their minds? I've read other comments in this story pointing out that folks in India have extended families to care for, that they probably had to quit jobs they couldn't get back, etc etc etc. Well, the knife cuts both ways.
You guys weren't being aggressively competitive. You guys were simply used. We know how you feel.
Thing is, as we had to explain to our families why our jobs were being sent overseas, we knew the cold truth that you guys are learning now. It was never about better, or even about as good. It was about being okay while being cheaper. A lot cheaper. Period. Corporations did it because it's easier to look competent short term by cutting costs than by increasing income, and the unfortunate truth is that the American economy right now is still pretty much driven by cost cutting. It was also inevitable that, sooner or later, the incentive would begin to evaporate as those outsourced employees started asking for more money.
A few years ago Dilbert did a strip where our boy tells PHB, "I have some disturbing news. We outsourced our customer service function to India a few years ago. Apparently, they subcontracted the job to Mexico. Then Mexico subcontracted to Vietnam, who subcontracted to the Philippines. . .. who subcontracted it to us. It turns out that we're the lowest-cost provider, because we lie about our hold times. In summary, we pay ourselves to hose ourselves. Are you thinking what I'm thinking?"
PHB: "We should raise prices?"
That's it in a nutshell. Again, welcome to the party - chips and dip are in the corner.
For the record, I agree that doing a three-month cocktease in India was a shitty thing for Apple to do. But then, so was bottom-dollar outsourcing it to begin with. Live by the sword, die by the sword.
Re:$40 (Score:5, Insightful)
Uh, before you brag too much, you might want to check this [worldbank.org] out.
$800 a month in India is more than 3 times more than the income of an average person in India.
$732 a week is only 20% higher than the average Canadian. So imagine making 3 times more than you do right now, and you'll have some idea of how well that guy's doing in India.
That's why outsourcing is so popular. In theory, companies can hire 4 people in India for the cost of one co-op student here. And to top it off, all 4 of the Indians will be living like kings.
Re:I have run across a good number of ... (Score:2, Insightful)
My hunch is that the Indian office overpromised and started working on some shoddy hacked together stuff. When it saw the light of day, the plug was pulled.
Maybe that's your own damned fault? (Score:5, Insightful)
EXCERCISE SOME FISCAL RESPONSIBILITY! If you make $120,000 a year and are one mortgage payment away from being on the street, it's because you're being stupid with your money.
Outsourcing (Score:4, Insightful)
In industry generally you outsource when you have a large batch of work to do and you don't want to ramp up inhouse. In the software business this generally means finding someone to churn out mountains of code.
The resulting mountains may look good on the monthly sloc metrics but its not what you want to see as an engineer. If a programmer comes back to me and says he made the required changes and produced negative 200 lines of code I would be happy.
One reason that a company like apple might decide not to proceed with something like this is that mass production is not really what they are looking for.
I don't have any problems with India specifically and I think we are going to see more of this situation where the large packages of work, which are less interesting for me anyway, going off shore.
Re:Maybe that's your own damned fault? (Score:4, Insightful)
Or, you live in California.
Re:Maybe that's your own damned fault? (Score:4, Insightful)
There are some problems though.
95+% of the people around you do not. They think that you are crazy. In some jobs sectors it is consirered to be essential to maintain some "class" and it may be very detrimental to your career to be different. Most of banking, finances and consluttancies are angaged in an endless penis measurement contest and it takes some guts and thinking to avoid getting into it or maintain financial discipline. This is especially true if you are a few steps above the bottom of the corporate ladder, high enough for the penis measurement to be in full swing, but too low to have the finances to afford it.
So as a matter of fact, the culture of the industry sector and the employer need to be taken into account when looking at a salary. 50Kpounds in a "plain IT" or "plain Telecoms" in old Blighty are a reasonable amount of money. 50Kpounds in the banking industry or most consluttancies are peanuts. You will either have to stay one payment away from being thrown out onto the street or you will have to cut somewhere on the "perceived class". In the latter case you essentially volunatrily put yourself on the list of the "first ones to go when the times get tough".
Re:India has a huge problem though.... (Score:5, Insightful)
Because being paid above-average Indian wages in India will buy you a better standard of living than average or below-average wages in America?
I'm from the UK, and I recognise that although, on exchange rate terms, I could probably get a higher income by working in the US, the extra costs (including social costs) would probably cancel out most, if not all, of the benefit. Of course, the smart thing is probably to work in the US for a short period of time, save as much as possible, then either retire in a cheap part of the world or use your previous highly-paid employment as evidence that you should be as highly-paid in a cheaper part of the world. That all sounds like a bit too much hassle for me, though...
Re:we were wondering too (Score:3, Insightful)
The conditions in China are not near to "people are starving"
Learn some history
Re:Maybe that's your own damned fault? (Score:3, Insightful)
If someone explained to me that owning a property is basically renting for free, I would have done that in 1999.
Re:spare us the elitism (Score:3, Insightful)
There are families in the united states that survive on just over minimum wage with little governmental assistance. If you ever pulled down $300k a year and find yourself in hard times, you pretty much fucked up and probably should be allowed to handle your personal finances anymore.
Re:Socialism??? (Score:2, Insightful)
The Labour Party describe themselves as socialists to try and keep the socialists on their side. They are far from socialist now.
They used to sing the Red Flag before their party conferences and believed in state ownership of economy. When Tony Blair became Labour leader, he removed Clause IV from Labour doctrine (the most sacrosanct clause the party had, it was about public ownership of the highest levels of the economy) and stopped them singing the Red Flag. To try and convince socialists that they are still socialist, they have this apparent 'middle way', where arrangements called Public-Private Partnerships are arranged. This is basically privatisation by another means. Example of a PPP: hiring private company Borlis to maintain public highways.
The Labour Party is as conservative as the Conservatives used to be, and in moving this way they've forced the Conservatives even further out to the Right.
Re:we were wondering too (Score:3, Insightful)
Or perhaps we should insist that the CKD or SKD kits of cars that are imported should be made by Indians in the US? Boeing passenger and fighter planes ought to be manufactured by them in India by Indian workers only?
You can see how far things can be pushed with the same rationale. Besides, businesses create costs in the US - but they pay taxes there too and not in India. With the costs they save on labour, they pay out increased dividends. Did you happen to forget that?
Re:we were wondering too (Score:1, Insightful)
A little downward convergence would be a great thing for the world, if it was accompanied by an upward movement wrt our spirituality.
The graveyards are full of indispensable men (Score:2, Insightful)
You know, even at the top of the heap, executives and senior managers sometimes get the boot suddenly and without pity, just like this. Look at what happeneed to Carly Fiorina. As Charles DeGaulle said once, when being begged to run for another term as President of France, "the graveyards are full of indispensable men." Everyone is a replaceable cog in a giant machine, and nobody should be surpised or discouraged because of it. If you don't like it, start your own company where you can be the undisputed kingpin.
-ccm
Re:Maybe that's your own damned fault? (Score:4, Insightful)
Re:spare us the elitism (Score:3, Insightful)
Apparently the men are finally getting the message: If there is a divorce you *will* be screwed for a very long time. Everyone seems to know someone who ended up paying the house payments while the ex lived there with her new boyfriend or someone who paid child support, got to see their kids 6 days out of 30 and watched the money spent on toys for the ex-wife instead of the kids.
And 50% of marriages end in divorce so you have a 50/50 chance of your "true love" turning into a pox on your existance-- and that's assuming you didn't do something to deserve her wrath like screwing around-- if you did that she is likely to spend the rest of her life thinking of new ways to torment you.
Re:we were wondering too (Score:3, Insightful)
As far as I can tell, it isn't $80K/year jobs, it's credit. There are all sorts of funky mortgages out there, for example. Balloon payments that can be re-mortgaged when they are due, interest-only mortgages that don't reduce principle, mortgages whose payments start low as a "hook" but go up after a few years, someone even mentioned that there are 50-year mortgages, etc. I was also baffled at seeing six and seven year car loans. It used to be that people would try to pay off their cars early and ride the no-payment gravy train for a while. There's also "no payments until past next year" financing for smaller items (furniture, electronics). The CC company keeps increasing my limit, even when I've never had a large balance, ever. There's also car title loan shops and check advance shops popping up everywhere--they must do a good business.
Children need to learn about cash flow and how loans make banks money. This should be required learning in junior high/high school--before the first credit cards are issued. People are literally pissing away whole years of work for "interest" on small things like cars, beds, and big screen TVs. It's pretty sad.
Just a little about the Army (Score:1, Insightful)
It may be hard to imagine for some people, but there are those among us that willingly sacrifice some of taken-for-granted pleasures in life for a larger purpose.
So even if the military isn't your thing, or you think it's evil, fine. Use the Peace Corps or Doctors Without Borders as my example. I never hear anyone say "Boy they treat those Peace Corps volunteers like shit! I bet they don't even have cable TV!"
What's good for Bill Gates... (Score:2, Insightful)
Doc
http://www.salon.com/news/feature/2006/05/26/visa
What's good for Bill Gates...
The Microsoft mogul says America needs more foreign engineers and programmers to compete. Critics say it's all about cheap labor.
By Rebecca Clarren
Salon Magazine
Generally, industry lobbyists are quick with statistics and reports, but in this case it appears they weren't needed. Neither Microsoft nor Intel would reveal how many Ph.D.s or master's students they hired last year, and how many they need for next year. When the companies and their lobbyists were asked what data and reports they showed Congress to convince them of the need for these new visas, they reported that they don't have any reports and statistics. Marcus Courtney, president of WashTech/CWA, a tech workers union, says as long as they have Bill Gates on their side, "they don't need to use anything to substantiate their arguments."
"William Gates was in Washington, lobbying -- a pretty high-priced lobbyist -- to come talk about the needs of Microsoft, a marvelous company, high-tech, enormous advances for America -- he wants more people with Ph.D.s and wants a larger quota of visas for those people to come in," Sen. Arlen Specter, R-Pa., the bill's author, told Salon when asked what data the industry had shown him. "We have accommodated that. And we have created more opportunities for people to come in who are students."
Such ardor for Gates flows from both sides of the aisle. When asked about reports and data presented to convince Democrats on the Judiciary Committee that the U.S. didn't have the workforce it needed to fill these jobs, Tracy Schmaler, spokesperson for the Democrats on the Judiciary Committee, responded: "Did you know Bill Gates has been pretty high-profile on this?"
Critics of the bill, mainly academics and those who represent American tech workers, say they have no voice on this issue; that Congress has been blinded by campaign contributions of big companies. In 2004, Microsoft alone spent $9.46 million on lobbying and hired 16 different firms; it listed immigration as one of its top issues on lobbying disclosure forms, according to data from the nonprofit Center for Responsive Politics. That same year, computer and Internet industries spent $70.5 million on lobbying.
"There is no greater case study to understand corporate power in politics," says Courtney of the tech workers union. "I could give you 75 reports that prove that H-1B is a horribly flawed program that hurts American workers, but it doesn't matter. As long as Bill Gates says there's a shortage, and that's it, thanks for playing, game over, try again next session."
Re:Socialism??? (Score:1, Insightful)
Not purely socialist, this is true. That's why France and Germany haven't collapsed financially - yet - the way Russia did. But their government spending is simply not supportable by their economies, and that's entirely due to socialist policy.
(The US is presently running a huge budget deficit, but in contrast to the other countries I mentioned, economic growth is more than sufficient to make up for it. US government debt as a proportion of GDP is trending downwards.)
Rubbish. The European countries with the largest state sectors, the Scandinavian countries, have the strongest economies in Europe, hence the notion that it is the size of the state sectors leading to problems in France and Germany is clearly not tenable. The reality is that very rigid labour markets are responsible for their high unemployment rates: owing to the labour laws, it is virtually impossible to get rid of unnecessary workers when times are bad, so firms are very reluctant to take on new workers when times are good, and the result is high levels of unemployment. This labour market rigidity is entirely unrelated to the size of the welfare state, eg the Scandinavian labour markets are amongst the most flexible in Europe (and this is acceptable to workers because the high level of state support to the unemployed means that losing a job will not destroy an individual's way of life during the time that the individual is retraining or looking for a new job), so unemployment rates are low.
As to growth, the higher growth of the American economy versus the European economies is almost entirely down to demographics. The high level of immigration to the USA leads to a constantly growing labour supply, and hence higher total output. When looked at in per capita terms, which is what matters for the standard of living, American growth rates are much less impressive. Moreover, any advantage that does exist evaporates when working hours are taken into consideration (American workers 'choose' to work much longer hours than most European workers would tolerate).
In other words, if you constantly add more workers to the economy, and demand that they work longer and longer hours, with virtually no annual holidays (in Scandinavia, we get much longer holidays than you do in the USA, in addition to much shorter working hours when we're not on holiday), you're obviously going to see an increase in output, but the value of this is unclear. If I can already afford a quality of life I like, working longer hours, or giving up some of my holiday, to produce an even higher income does not raise my standard of living, but lowers it! On the other hand, if the accumulation of more and more possessions has greater value to you than your free time, spending ever more time working will allow you to buy more things (though I can't see the point of owning more and more things, if you have no time to enjoy them).
The problem of sustainability of the welfare state is common to all industrial countries, because our societies are ageing. The average lifespan is increasing, and with a fixed retirement age, this means a smaller portion of life is being spent working. In order to offset this, the retirement age must obviously be increased, to restore the proportion of work years to pension years.
The American 'solution' of bringing in more and more immigrants only delays the inevitable, since the immigrants will one day grow old too. Hence it is no solution at all, but more akin to a ticking time bomb. If you keep delaying the inevitable by bringing in more and more immigrants, you'll eventually become as overpopulated as places like India, and yet this giant population will still age, and so you'll still have to face the situation eventually (only it will be much worse).
Incidentally, with unemployment levels similar to the USA overall, all of the Scandinavian governments are running budget surplusses, wit
Re:we were wondering too (Score:2, Insightful)
I suppose that it can be true that wages rise faster than inflation in one particular area, in the short term. Inflation does not always imply a decrease in purchasing power. However, in the long term increases in standard of living and purchasing power are realized by increases in production efficiency. By being able to increase the quantity produced by utilizing the same amount of capital or labor real prices will decrease and more goods will be available to the market.
More generally when employment and/or wages increase so does the price inflation in that market. India is a country that is already beginning to experience this, even if it's just in certain sectors it will eventually spread to all parts of that economy.
The fact is that your comment a few posts ago about "they'll make their money in the short term" is in fact fine. Because who defines how long terms are? Any company making any money in any period is fine. It means more wealth, more products, more emploment, etc. The companies don't just take it and stuff it under a pillow, it gets spent somewhere else. Who cares if they move to 50 countries with 50 new industries. It just means cheaper products for you and I and a growing economy for you and I, and the rest of the world. This isn't a zero sum game, wealth is being created throughout the world by teaching other countries to use their resources to educate their people, create technologies, and use their comparative advantage in certain industries to make everyone happier.
This is for everyone else not you: Someone would innevitably bust in here about how I wouldn't say that if I had lost my job to an Indian or something. Guess what, I have lost jobs to people. Big deal. There is no magic doctrine that says I get to do what I want when I want because I'm better than someone else and am more deserving. You get another job. You work at McDonalds if you have to. You do whatever it takes. If it hurts your pride and it's hard to feed your kids and yourself and they foreclose on your house and you have to live in public housing, then you do it until you can make it better. It's competition and everyone can't be on top. But throughout time more people will be better off because of it than are worse off.