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Apple Pulls Out of India 696

Posted by Zonk
from the curious dept.
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."
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Apple Pulls Out of India

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  • by Clay Mitchell (43630) on Saturday June 03, 2006 @09:31PM (#15464185) Homepage
    heh, if you want to feel small, insignificant and just like a number, there's no place better to go than a Fortune 500 company. I work for a very large bank, and I have absolutely no illusions about what I am to them.
  • 30 people (Score:5, Interesting)

    by eltoyoboyo (750015) on Saturday June 03, 2006 @09:35PM (#15464193) Journal
    The company had commenced operations in April and hired about 30 people for its subsidiary

    In Silicon Valley, a one cough by a hiring manager can cause 30 people to disappear overnight. Thirty people in India represented less than a million dollars worth of pocket change to Apple. The story in really, "What were they attempting to do in the first place?"
  • Irony (Score:2, Interesting)

    by gyrogeerloose (849181) on Saturday June 03, 2006 @09:39PM (#15464207) Journal

    When I first viewed the comments on this article, the quote at the bottom of the page was this:

    The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of misery. -- Churchill

    Do you figure that since socialism has gone bust, capitalism has had to take over the sharing of the misery?

  • Re:Payback's a bitch (Score:5, Interesting)

    by mukund (163654) on Saturday June 03, 2006 @09:46PM (#15464232) Homepage
    I'm surprised the parent post got marked insightful.

    It's not the Indian programmers' fault that US programmers' jobs get outsourced to them. So it's not exactly medicine they're delivering. US jobs get moved to India because US capitalists want to increase their profits by getting the same job done for less money in India.

  • by Anonymous Coward on Saturday June 03, 2006 @10:40PM (#15464414)
    Many companies are coming back to the US for Software Engineering. Especially mid size companies. The company I work for also recently canceled its dealings with its Indian outsourcing firm. They had two reasons:
    1) In 2001 with benefits, a decent Software Eng:
    $60/hour in USA versus $5/hour in India
    In 2006 with benefits, a decent Software Eng:
    $60/hour in USA versus $25/hour in India
    No longer worth the hassle of communication problems and slow response time to fixing defects.
    2) Quality of their work was awful. This seemed to be due to major attrition problems. The attrition rates at the firm we were using were like 50% a year. Even their manager's were job hoping. So nobody really cared about quality since they knew they would be long gone to better pastures before it caught up with them.
  • by guruevi (827432) <evi@smokingcCOFFEEube.be minus caffeine> on Saturday June 03, 2006 @10:41PM (#15464419) Homepage
    that the cost of outsourcing is higher than the hype tells it to be. A lot of businesses try to outsource to India, and while it might work better for some companies, I guess the cost of a = inferior customer satisfaction and b = more people needed for the same work equals c = higher costs in the long run. And since a is more important for Apple they've seen outsourcing is not a good idea.

    Don't get me wrong over b, I guess there are great people out there, but first of all: they don't speak English very well (ever called an outsourced helpdesk and you know), second of all: they are not educated as we in the westerner countries, so they need to be educated more and longer on the job while we are supposed to get that education through our schools. It's not the inhabitants fault, but India is pretty close to a 3rd world country.

    Next to that they also have a higher constant cost. TFA mentions shipping over some people for education in the states. They can do it 2 ways: ship someone from west -> east and pay big $$$ (250k/year) for someone willing to do that and ship over his family and belongings back and forth every 3-6 months for 30k/year and cover the costs over there for 50k/year. Or ship 20 people every month from east -> west for 2 weeks and cover their costs for 400k/year.

    If you don't do it yourself and outsource your outsourcing to a "specialized" company, you'll see that the costs equal the costs you have here but without the hassle of outsourcing, keeping your customers happy only thing is that you have to keep in account the unions.

    I don't know, while outsourcing could be helping keeping costs down, I think the only thing that should be outsourced is labour by hand without customer contact. This is not because the people over there don't have brains, but simply because of the differences in language and culture. They are trying to fix that too, but what do you think when you call the D-Link helpdesk and "Bob" speaks with an Indian accent and ask how the weather is down there in Ohio? Yes, they have cue sheets with different lines that people in the US would use, but it just sounds wrong, try it.

    And just so I wouldn't break Godwin's law: why didn't hitler outsource his stuff to India?
  • by mellon (7048) on Saturday June 03, 2006 @10:47PM (#15464431) Homepage
    Mass outbreaks of prosperity. Why is this so scary? If wages were pretty much the same in all countries, you would never again have to worry about your job being outsourced, and you wouldn't have to listen to lectures about children starving in China either. Granted, you'd probably be able to afford fewer toys, but I am pretty sure you would not starve to death.
  • by dfjghsk (850954) on Saturday June 03, 2006 @10:53PM (#15464455)
    Granted, you'd probably be able to afford fewer toys, but I am pretty sure you would not starve to death. Ah.. well as long as I don't starve.. what else do I need? sounds like a paradise.
  • by mellon (7048) on Saturday June 03, 2006 @10:56PM (#15464467) Homepage
    Can you call a thing paradise if, in order for it to exist, someone else has to suffer? And in fact can you call the life the average U.S. geek lives paradise anyway? I mean, if you're one house payment away from the street and pulling down $120k/year, is that really a desirable situation? It's just crazy.
  • by Anonymous Coward on Saturday June 03, 2006 @11:05PM (#15464504)
    This is slightly offtopic, but let me explain the state of affairs on Indian Software Services companies. This is not about product companies which operate here.

    I guess I'll be the only Indian in the world who'd wish this outsourcing boom would settle.

    Why?
    Because we have contributed nothing to computing, technically or in research. This is more about the attitude of Indian software services companies. Infosys, TCS and the like, relegating writing software to a BPO styled operation. Cut and Paste mechanics, unhealthy and ugly code. 95% of coders here plain suck. I really hope software dev automation gets a breakthrough, so these guys lose their jobs (for which they are not qualified anyway).
    These companies are surely helping India with jobs, but they have done _nothing_ for computing. (How many Indian Open Source products do you know!)No contribution to open source, and full scale leeching. Meanwhile, revenue is upwards of $2billion, profits $600 million plus. Yet.

    Damn, I dont wanna think about it.

    Btw, this is not a problem with Indian techies, there are so many of them working in research (abroad and in India) who are really good.

  • Obviously you made a mistake in hiring them in the first place.

    Firing people is bad for morale. It means that people shouldn't trust you. It means that your remaining employees should start looking for a different job.

    Whenever I was a manager, I protected my employees. If they messed up, I coverred for them and helped them fix the problem. I have their back and I expect the same in return.

    I think some people feel that because India is a long way away those employees don't matter. Only a sick kind of employer would feel that way. Once you hire someone you owe it to them to make it work.

  • Oh, but he did (Score:1, Interesting)

    by Anonymous Coward on Saturday June 03, 2006 @11:20PM (#15464552)
    It just didn't work very well [bbc.co.uk] for him either.
  • Re:say what? (Score:5, Interesting)

    by EddydaSquige (552178) <jmb@gocougs. w s u . e du> on Saturday June 03, 2006 @11:28PM (#15464579) Homepage
    Your joke has a lot of insight to it. About 3 months ago I called apple care, which used to be the best damed tech support around, and the guy on the other end gave me so much obviously wrong information that I have doubt that knew anything at all about the Mac. On a brand new Quad (I was having monitor problems) he suggested that I didn't have the right video card to run a 23" screen, and suggested I install an older video card that wouldn't even fit in the PCI Express slots. I was flabbergasted at his handling of the problem, he paid no attention when I informed him that his solution would never work. Not only did I file complaint through the normal channels, but my reseller filed a complaint through their Apple rep. Worse tech support experience ever. I've had better service with ISP support.
  • by Anonymous Coward on Sunday June 04, 2006 @12:03AM (#15464702)
    Here is my 2 bit theory.

    Steve wanted to stay in Cupertino. If you listen to the town meeting from a month or so ago it is clear that getting the land for the new campus was not a sure thing. Estimates are that Apple paid 500 million for the land for the new campus. India was probably more of a contingency if they couldn't expand in Cupertino. Once that deal went though, then they needed to back out so as not to stretch themselves too thin.

    It would look pretty silly spending 0.5 billion on a new campus and then have no one to fill it with.
  • by Andy Dodd (701) <[ude.llenroc] [ta] [7dta]> on Sunday June 04, 2006 @12:38AM (#15464838) Homepage
    I'm inclined to disagree with that. I just finished my M.S. at Rutgers, where the majority of the students in the graduate program were either Chinese or Indian. (The lack of U.S. citizens in a graduate program at a state university where tuition is DIRT CHEAP for state residents and pretty inexpensive for others says bad things about U.S. attitudes towards higher education...) The Chinese students, for the most part, barely spoke English at all and I'm surprised any of them were able to complete their classwork given the difficulty of understanding and communicating with their professors and fellow classmates. The Indian students had at least been educated reasonably well in English so that they were understandable. The problem is that while they may have been educated in English since the 11th grade, they were most likely educated in English by a non-native English speaker. Think of the game of Telephone, where after being passed from person to person, a message is distorted so much as to be barely understandable. It's same thing with "second generation" (or more) English language education. Yes, it was possible to communicate with the Indian students and much easier than the Chinese students, but it was still *extremely* difficult due to the thick accents. Yes, even if one's grammar is perfect, a thick accent can make verbal communication extremely difficult. By the way, most of the Indian students in question could write extremely well. It was only their spoken language that was difficult to understand. Unfortunately, even in technical fields, verbal communication is important. In technical support fields where outsourcing is currently the most common, verbal communications is *EVERYTHING*.
  • by SteeldrivingJon (842919) on Sunday June 04, 2006 @03:08AM (#15465222) Homepage Journal
    " India was probably more of a contingency if they couldn't expand in Cupertino."

    I don't think it's related to the expansion: the expanded campus won't be ready for a few years, so cancelling the plans in India now leaves a big gap.

    Steve Jobs won't settle for quickly erected generic office space. That would be wildly out of character for the guy who had I. M. Pei design a floating staircase for NeXT headquarters, and who built that whole glass cube Apple store thing on 5th Ave.

    It'll probably be 18 months before he signs off on a design by some 'name' architect. (For the sake of Apple's employees' vision, I hope it's not some blindingly reflective (yet old hat and ultimately boring) titanium-sheet Frank Gehry design.) It'll probably be another 6-12 months before the foundations are laid.
  • by tibman (623933) on Sunday June 04, 2006 @03:20AM (#15465243) Homepage
    I absolutely agree with that. Sometimes i'd envy those Airforce guys. They'd get chinook'd anywhere they wanted to go and were always standing around having fun. But i'm drawn to that regimented quasi-machine spirit of the Army. The Marines are even more hardcore on this front.. but too much for me. The AirForce were always on the top of "who's cool" until is was mission time. Then is was the Army. We never had to discuss how it was to be done. The commander says GO!.. we go. No one is complaining or saying it's not fair or trying to wiggle out of it. Marine Corp officers are generally better than most Army ones in my opinion. Well.. maybe not better, but less political and more down to business (better in my view). But you are more right than you know, the AirForce is where it's at if you want to still be "you".
  • tech support too? (Score:5, Interesting)

    by v1 (525388) on Sunday June 04, 2006 @03:48AM (#15465310) Homepage Journal
    the software and support will be completely pulled out

    I wonder... I am an apple service tech and we have lost our dial-in support for service assistance in leu of an ichat-like support from... you guessed it... India. I talk to Chetan quite a lot but the names are very clearly all Indian. (they don't do like some tech support places, where you get someone with a hip-deep Indian accent who introduces himself as "Greg". Ya right...) A few times I've asked them where they were located, and it was of course some city in India. They do seem to be "otherwise occupied" when I chat with them, with 3-10 minute "ping times" on their answers being common. I also asked one of them one time, how many people are you chatting with right now? He says NINE. wow. Indians apparently have one thing on me, an amazing ability to multitask to the extreme.

    While the people we are chatting with are actually quite capable and do a good job, they are being pushed much too hard to offer the level of service we were used to by the US reps on the phone. I don't know if that's Apple demanding it, or the Indian phone support business offering a no-questions-asked calls-taken-per-hour rate.

    I seriously wonder though if this includes the service support also. I would like to see it go back to the old ways. If they are doing it, I would not be surprised if it were based on the feedback that they are receiving on their quality of service. "Sweatshop" work is never high quality.

    If it's just the customer support that's being moved back, best guess would be the customers do not like talking to someone that they clearly can tell is not even in the same country. I know it slightly irks me when I call some support/help number and get someone from India. (why is it always India? why can't it be Russia or Japan or Africa?) I think that even if the person on the line is knowledgeable and helpful, knowing it's someone from India (or any other country really) tends to put people in the mindset that they are not receiving high quality support, possibly because they know that the support person is probably receiving a very small wage compared to what it would be in the 'states.
  • by jma05 (897351) on Sunday June 04, 2006 @04:00AM (#15465338)
    I am an Indian. I agree with the observation but disagree with the generalization. I lot of people I knew in India were indeed strongly oriented to the MS tool chain (not even Borland). I, on the other hand have tried just about every major programming language and most programming paradigms. To put in context, I do NOT have a CS major. I am a physician who programs/sys-admins as a GRA around 20hrs/week to pay for a PhD in the US. But I would have still programmed as a hobby (and have for about 14 years now) even if I did not have this need.

    My reasons for this behavior are ...

    1.) Most Indian developers see programming as a lucrative career. So it is strictly business for most of them. Most devs of this kind don't go home and continue to program for "fun". It's work. If you can't sell your Haskell skills, no point in acquiring them.
    2.) The educational institutions have evolved this way too. Most devs learn programming, not from college (even if they have a CS major) but from independent training centers that train you in job focused skills but not the whole "Computer Science" theory. The training is strictly main stream IT (to emphasize again - not CS). I on the other hand, am a geek, self-taught, learned programming for the sake of programming and even lectured a few Masters classes on Software Engineering and HCI.
    3.) Finally the disagreement. Why generalize on Indians?. Now that I am in US, every non-geek programmer I have seen here is not much different either and is just as hopelessly married to his language. However, US citizens tend to follow their hearts when it comes to profession. The economy allows it. So geek / non-geek programmer ratio is more favorable. In India, you don't have that luxury. People follow the money (for good reasons). They do work hard at the skills but you can only get so much into it if you are not inherently passionate about it.

    If you want good Indian programmers, scope them out and do your own interviews and select them just like you would locally (perhaps only possible if you have an Indian branch for your company). That outsourcing corporation will not cater your non-generic needs.
  • spare us the elitism (Score:2, Interesting)

    by Scudsucker (17617) on Sunday June 04, 2006 @04:21AM (#15465404) Homepage Journal
    If you don't want to be living one mortgage payment from being out on the street, DON'T! Learn to live within your means. Put 25% of your money into your retirement account. blah blah blah

    You can do all that and more and still be up a creek if you have a run of bad luck. Hell, you could be a VP earning 300k a year and enough money saved up for six years worth of bills and be royally screwed by the loss of your job and any of these events:
     
    • Catastrophic illness/accident. Yes, you have great insurance, but it doesn't cover everything and your bills are in the hundreds of thousands of dollars.
    • The housing market finally takes a big dump. Your little condo in San Diego that you bought for $1.5 million a couple years ago is now worth half that much, and you still can't find any buyers.
    • The nice girl you met in college and married has now turned into a greedy, psychopathic bitch after 8 years of marriage. She divorces you, takes the house, half your assets, primary custody of your two kids and the court awards her hefty child support payments.

    The last can be a real bitch, because states get matching funds from the federal government for the child support they collect, so they have a strong incentive to collect as much as possible. It is difficult to have payments reduced in the event of a job loss and in any case might be set based on what you "should" be making. Some of the more draconian states will even seize your car, which doesn't make a whole lot of sense if you have to drive to get to your job.
  • Outsourcing....... (Score:4, Interesting)

    by segedunum (883035) on Sunday June 04, 2006 @07:53AM (#15465826)
    What goes around comes around, as they say. I've been amused by many companies over the years who thought they could save a huge bundle of money, when in reality the staff employed in those functions they want to move makes up perhaps 20% of their organisation but makes the most impact. Do people in a foreign country answering your calls, where it is totally obvious they know not even the most basic things about where you live (and you have waste time and money repeating things twenty times), does that sound good and make you want to use that company? I'll quote Joel Spolsky and Pradeep Singh:

    (Here's something Pradeep Singh taught me today: if only 20% of your staff is programmers, and you can save 50% on salary by outsourcing programmers to India, well, how much of a competitive advantage are you really going to get out of that 10% savings?)

    You also have the additionally huge costs of training those new employees, or outsourcing organisations, up in the ways of the organisation, the products, the technology and you also spend huge amounts of wasted time and money on communication. I've known many banks who've had that experience. A poor call centre worker gets the warm ear treatment from a customer in Europe, US, Canada etc. because the website is throwing up errors and he/she can't complete a transaction. A call is logged and there is a series of frantic phone calls and e-mails to the outsourced programming company in India, who needless to say, haven't got the faintest idea what they're talking about. Also (and this happens even in outsourcing companies situated in the same country but in another part) because they are not physically located in the heat of battle, and within on-site reach, they just don't give a shit. They'll do it when they've got time.

    In short, you need to have your support functions in your company with you completely, and they need to be as close to your paying customers as you can get. If there is a market in India for your products then by all means get close to your customers and open offices in India. Idiot CEOs and boards still have this ridiculously stupid fucking idea that the world is a place separated only by a common language - English. I think even British, American and Australian people can agree that that is most certainly not true. I suggest these idiot board members go and read the number one, definitive guide on running a multinational company properly:

    http://www.amazon.co.uk/exec/obidos/ASIN/186197691 7/sr=1-2/qid=1149421474/ref=pd_bowtega_2/202-73591 57-8712641?_encoding=UTF8&s=books&v=glance [amazon.co.uk]

    What happened here is difficult to tell from the article, but maybe Apple had that sneeking suspision that maybe it just wasn't going to work.
  • by Anonymous Coward on Sunday June 04, 2006 @09:33AM (#15466109)
    I know it is really fashionable on Slashdot to say that quality of software from India is poor but that wasn't the reason according to a friend who got laid off.

    Perhaps it's fashionable to say so on Slashdot because that's the (admittedly anecdotal) evidence Slashdotters have seen. I'll relate my experience: I worked in an office with 6-7 Indians. When business began to boom they opened a satellite office in Chennai. The company hired 10 programmers. The head of operations (again, Indian) personally interviewed all the candidates and proclaimed them as "top notch". The reality was completely different. Only two of them were worth a damn. We had to filter their progress reports ("80% complete" meant "Not started", "Almost complete" meant "Just started", "Down to fixing bugs" meant "Rewriting to the spec that we ignored in the first place"). Lest you think that's just an ignorant racist American speaking -- that was from the Indian project manager. (As an aside, the company only had two non-Indian employees. I was one and the other guy was a "token" VP used to whitewash their appearance to corporate clients). Sure we could have only hired 2 guys here for the cost of the 10 guys over there. But we would have done a lot better on schedule.
  • And moves to China (Score:3, Interesting)

    by heroine (1220) on Sunday June 04, 2006 @04:28PM (#15468117) Homepage
    These articles don't often mention it, but when companies move out of India it's because Indians are too expensive and Chinese are now the cost winners.

  • by Anonymous Coward on Sunday June 04, 2006 @09:07PM (#15469281)
    Well, a little over a month ago, Apple ended relations with their support site on the east coast who were a driving force behind Apple's support growing as much as it did. Presumably, they had ended relationships with them in order to begin outsourcing more support to India. This is pretty friggin' ironic because many of those people were under the impression that all of the support was going over there at one point or another. I guess they realized it wasn't a smart move seeing as you couldn't understand half the technicians over there.

    A little bit of trivia; they had the folks over in Bangalore watch "Friends" in order to get an idea of what American culture was like to better interact with them on the phone. Just a tidbit I found interesting.
  • From everything I've read about Steve Jobs, this makes a lot of sense.

    Here you have a man who is a total perfectionist. Obsessed with quality, down to the very last detail.

    My guess is that some high-up Businesshead Suit Guy whispered in his ear, "Y'know, Steve, we could save a lot of money by outsourcing...."

    Steve was probably reluctant at first, but then the Businesshead Suit Guy hyped it up with a bunch of Thomas-Friedman-speak, "This mind-blowing business practice will revolutionize how the world does business, like what corned beef did to sliced bread! Everybody and their brother is doing it! You don't want to be the guy who invented the pet rock! You want to be the guy who invented the pet WORLD! Don't get left behind! Outsource, outsource, outsource!"

    Steve was probably like, "Oh, alright, I'll give it a shot. We'll start small, and see how it goes."

    So he commits a small amount of money to his India project. Lo and behold, what he gets back is crap, and he's like, "What is this? This is crap! The quality is terrible! There are a million little widgets that are all in the wrong place. This little graphic thing was off by a whole 5 millimeters. 5 millimeters! My customers will hate it! I can't even get anyone on the damn phone to fix it! Every time I want bring someone to task over this, all they can talk about is their damn contract! Hey Businesshead Suit Guy? Where the hell are you?"

    Unfortunately, Businesshead Suit Guy is nowhere to be found. He took the big fat bonus that he got from saving the company so much money through outsourcing, and is off vacationing someplace exotic.

    Possibly even in India. I've heard that money goes a lot further down there.

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