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Thursday, March 20, 2003

The legal action will step up the conflict between technology companies and American engineers over the H-1B visa program, which lets companies "temporarily" bring foreign workers into the United States ... whether they are needed or not.

Class-action status is being sought for the lawsuit, filed Monday by Walter Kruz, 52, in California Superior Court in Santa Clara. He worked at Sun from May 2000 until late 2001, when Sun was laying off about 2,500 of its workers in the United States.

The lawsuit says Sun had a bias against Americans and in favor of Indian hires. Sun's Indian-born co-founder, Vinod Khosla, admitted this year on CBS's "60 Minutes" that people from India "are favored over almost anybody else."

"According to the lawsuit, hardly any of those laid off by Sun were people of Indian descent. Instead, the company created a performance evaluation program that required managers to classify a certain percentage of workers as underperformers, the suit alleges. At the same time, workers who had been at the company for a short time were exempted from this evaluation program, ensuring that few H-1B visa holders would be subject to it. As a result, most of those found to be underperfomers were older, American-born workers," the Boston Globe reported Tuesday.

"At the same time, the suit alleges that Sun was applying for permission to bring in about 2,400 foreign workers, mostly from India, to fill technical jobs."

The law says H-1B workers must receive the same pay as U.S. employees, but Kruz's attorney says this requirement is easily evaded.

India's Tech Industry Faces Global Backlash

A few months ago, when unemployed mothers in New Jersey dialed a toll-free number to find out the status of their benefit checks, a call center thousands of miles away based in Bombay, India, answered their calls.

When New Jersey state senator Shirley Turner came to know about it, she saw the irony of it. An angry Turner drafted a bill that barred state contracts from going overseas, and the state senate passed the bill unanimously.

She wanted to ensure that government funds were used to employ people living in the United States, rather than workers in India.

Although the bill was later blocked by the state assembly, it sparked similar moves by four other states: Maryland, Wisconsin, Connecticut and Missouri.

Anti-India IT sentiment isn't restricted to the United States. From Germany, France and Britain to Indonesia and Malaysia, the Indian IT industry, particularly its software professionals, is facing the ire of workers, policy-makers and powerful unions.

Whether it's a case of enacting new laws or plugging holes in old laws, or imposing visa restrictions on Indian IT staff, or even harassment of Indian IT staff in some countries, forces are aiming to curtail Indian IT companies from expanding abroad.

"Our success has led to some resistance ... a kind of a pushback," said Kiran Karnik, president of the country's powerful software lobby, National Association of Software and Services Companies.

There are reasons for the economic and social backlash: IT and other high-tech jobs are migrating from developed economies to less-developed economies such as India, Russia and China. More than a quarter of the Fortune 500 companies have shifted, or are shifting, back office work to India.

3.3 Million U.S. Jobs Shipped to India

In a recent report, the research and consulting firm Forrester Research said that 3.3 million U.S. jobs in the services sector and $136 billion in wages are expected to move to countries like India, Russia, China and the Philippines by 2015. The IT industry is expected to lead the trend.

The report said that like the shift in manufacturing jobs in the last half of the 20th century, the huge cost advantage of these low-wage countries would drive the movement of services jobs.

That's bad news for developed countries, which are dealing with sluggish economies and high unemployment.

"Our formal request to members of Congress at this time is two-fold," said Marcus Courtney president of Washington Alliance of Technology Workers, a group of high-tech workers formed to advocate improved benefits and workplace rights. The group is an affiliate of the union Communications Workers of America.

"One, what is their position on the issue of high-technology jobs moving offshore, and would they support a Congressional investigation. Second is in terms of specific legislative proposals, though we have not come up with one, but it is something we are working on."

But the backlash is bad news for the Indian IT sector, which is still hoping to reach its $80 billion revenue target by 2008 (up from about $12 billion) by selling software and services abroad.

How is India facing the global backlash?

The Ministry of External Affairs hasn't done much yet, except in extreme cases such as a recent incident in Indonesia. There, two Indian software executives were held hostage by the Indonesian army in December.

So Nasscom has risen to the challenge. The IndUS Entrepreneurs, which evangelizes for Indian entrepreneurship and services globally, is also pushing the same agenda.

"The ball has already been set rolling," said Kiran Karnik of Nasscom, "and we are interacting with key decision and policy makers in the United States about the advantages of outsourcing to India that will accrue to the sagging U.S. economy.

"Nasscom will share information on how U.S. industries, especially banks, insurance and other financial institutions have benefited due to increased outsourcing of back office operations to India, over the years.

"U.S. banking and allied sectors are estimated to have saved $8 billion over the last four years by outsourcing to India." Nasscom is also working with Information Technology Association of America and U.S. businesses to draw up strategies to tackle the outsourcing issue.

The body has retained a public relations firm in the United States, Hill and Knowlton, to reach federal and state representatives.

But mostly, India's IT industry is banking on the fact that it still offers good value in software services, especially amid a global recession. The industry hopes that the United States and Europe face the cold economic facts sooner rather than later.

Copyright 2003 by United Press International.

All rights reserved.

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