Southern Cal Edison IT workers laid off and unhappy. Join the club

Southern California Edison IT workers have just now experienced IT's foul-tasting offshored amuse-bouche. The main course is much harder to swallow, but at least they're getting some attention over it.
Written by Ken Hess, Contributor

I feel bad for the Southern California Edison (SCE) IT workers laid off in favor of the decision to use H-1B workers. Your fellow IT workers have felt your pain for more than ten years. It's kind of ironic that this is getting so much air time, because unfortunately for many hundreds of thousands of American workers, this is nothing new. I'm sorry for your plight, but I have to say, "Welcome to the club."

It sucks having to train your replacements doesn't it? It sucks that you're threatened that you'll be separated from the company with no severance package if you don't train your replacement. It sucks knowing that the American company that you work for, and have been faithful to, can just displace you without a thought because they believe that their plan is going to have a positive impact on the bottom line. It sucks that the brilliant decision-makers believe that what they're doing is right for the company and that they're really saving money. And it sucks that it's happening to you.

But, don't worry, my friends, what seems cheaper now will soon be very expensive.

You see, one of the basic problems with offshoring is that on the surface it's very seductive. You're hiring someone who's "just as good" as your American worker for a third of the cost and that person works while you're asleep. It sounds absolutely perfect, doesn't it? It's like those late night infomercials that tell you that you can lose weight while you sleep or that you can make money in your sleep.

Yeah, well, reality isn't so rosy, is it?

Believe it or not, I've taken my share of criticism over the years for my stance on offshore outsourcing (offshoring) and H-1B visas for IT workers. I stand firm--firm in the opinion that it's a really bad thing to do to American workers. The reasons behind doing it are flimsy at best. Proponents state that it's less expensive and the workers are just as good. Two fallacies, I'm afraid that are like week-old pie--sure, it tastes sweet at first, but the stomach ache you get from it later isn't worth the fleeting goodness you experience in those first few bites.

Offshoring rationale goes something like this:

"There aren't enough US-based IT workers."

Wrong. There always have been. The problem is that now, after more than ten years of progressively aggressive offshoring by American companies, fewer Americans are entering the field, hence the self-fulfilling prophecy of "not enough US-based IT workers."

There actually aren't enough anywhere to fill the growing void. In the early days of offshoring, Indian companies were literally hiring people off the street using handbills to recruit workers and then providing up to six months of training to "get them up to speed." So American companies invested billions of US dollars in India and other cheap labor locations to educate and train workers to become call center employees. That was the first wave.

In recent years, there has been attempts to offshore higher level architect, engineer, and more senior-level administrator positions with a low rate of success.

"We're moving jobs to lower cost locations."

That's a clear fallacy because, it's true that you can pay lower salaries for a particular job, you have to replace your American worker with two, three, or more foreign ones. And you have to deal with high turnover rates, interesting bus schedules, time zone differences, cultural oddities, and the fact that foreign governments protect their workers from working too much.

Plus, you get no added benefits from sending your money offshore. Those workers don't purchase American products, they don't spend locally in the US, and they don't pay American taxes. Basically, you're getting a body, for eight-ish hours per day from someone who doesn't care one way or the other about the success or the failure of your company. They don't feel any ownership of their work nor do they feel responsible when something inevitably goes wrong.

"My shift is over," are the famous last words of your offshore worker as he or she drops the headset and heads out the door to board the bus.

The whole offshoring thing is really kind of funny, in a way, in that once a company is into it, they have to keep doing it to try to balance the work that's now displaced from the US. In other words, it's like a gambler who loses his money, but keeps gambling because now he's in too deep to stop. And neither the gambler nor the offshoring company ever wins.

It's very sad, really.

And still company execs wonder why they're stock is still not performing up to their lofty predictions. Some ivy league genius, in a closed-door meeting pops up with, "We need to be more aggressive in our efforts to offshore."

The problem is that it never works because your customers know that you're doing it. And they, in turn, want a cheaper price. You get more business, but it's at a lower price, and you never see an increase in the bottom line. The offshoring companies never figure it out. Customers also don't like it.

"It's our new 24x7x365 model."

Yeah, that's a good one. Ask IT worker who works in a company that offshores if they get more sleep now that the company is offshoring. The answer will be an unexpected, but ubiquitous, "No."

Why? Because, as I've written, it comes down to responsibility or the lack thereof.

My favorite offshoring argument is,

"We're a global company."

Really? Tell me exactly how much business you do in India. The answer is none. If by global, you mean that you hire people in India to "lower" your labor costs, then sure, OK, you're global. But that's not really what you are. Global means that you have actual offices in multiple locations around the world, where you do business with customers and you need staff there to service those customers. Opening a call center in India is not being global. Moving your application development there isn't being global.

"Offshoring is good for the economy."

If you ever hear this one, I hope you can resist physical harm to the speaker. Offshoring does damage the economy in the US. It is, however, a big boost to the folks in the cheap labor locations.

"We're seeing a boom in the Asian economy."

Really? Wow, how weird is that, when that's where you're sending the jobs. It's crazy now that you're giving people disposable income and yet you're astounded at how it's affecting their economy. Interesting.

I'm sure that the now displaced SCE workers heard at least one of these assertions along the way. But you know what's really odd about all of the offshoring that's done? It's never management, executive management, or C-level executives who are offshored. I know we could save a bundle if we offshored those positions. Seriously, a C-level executive who makes seven or eight figures per year in salary, bonuses, and other perks could be easily replaced by someone from India for a nice $500,000 salary and be perfectly happy with it. And those replacement would do just as good a job as their overpaid American counterparts do.

Until I see offshore outsourcing at those levels, I won't believe that there's any true cost savings from it. At those levels, you could actually do a one-to-one replacement and see some real value and cost savings.

My other argument against offshoring compares the practice to buying cars. The next time your company gathers you together for one of those meetings that tell you how bad you're doing and how they're going to "rightsize" the company by offshoring, please ask the following questions:

What kind of car do you drive?

The answers will vary, but for the most part, you'll find that management and executive management tend to drive expensive automobiles manufactured by Mercedes Benz, Lexus, Range Rover, Porsche, Volvo, Audi, and others.

If they feel that cheap is as good as expensive, ask them to trade in their expensive cars for the Yaris or other very inexpensive cars. They won't do it. Because to them quality matters. But apparently they don't believe that quality matters to their customers.

So, what if everyone practiced the "cheap is just as good" mentality?

I don't want to live in that world and neither do you.

For a final analysis of this problem, I turn to one of the many articles I've seen on the topic from Computerworld, "Southern California Edison layoffs get U.S. Senate attention." A few years ago, there were two bills, one in the Senate, and one in The House to stop offshore outsourcing. Democrats voted for it. Republicans against.

I hope the Republicans realize that allowing the unchecked offshoring of good paying professional jobs is going to hurt their party and their agendas. As I was explaining the pain of offshoring to a very Republican friend of mine in Wyoming a fews years ago, he had the epiphany that, "Oh my gosh, they could offshore attorneys too." No kidding. And who wouldn't rather pay $25 per hour for legal advice than $200 per hour? Maybe offshoring makes sense after all.

I don't gamble, but I'll bet you $100 that offshoring will take a turn when attorneys, doctors, executive management, architecture, and other highly paid, skilled jobs begin to flow offshore. To my counterparts at SCE, I'm sorry. I truly am sorry. But this trend is nothing new. That fact certainly doesn't make it right. I hope you find gainful employment with a company that doesn't participate in these activities again.

So, your question is, "What can we do about it?"

My solutions are simple.

  • Boycott companies that offshore
  • Write your Congressman and Senators
  • Write your Governor
  • Publicly protest
  • Join and participate in TechsUnite.org*

If we don't repatriate and reshore our jobs, our economy will continue to suffer. The reason is that for each lost job, there are several others that are affected. I've read that a single job loss negatively affects five other jobs in a community.

I'll leave you with a thought from one of my former Argentinian coworkers who told me of a local saying: How expensive is cheap?

To companies that offshore: Keep an extra bottle of antacid around. You're going to need it.

* I don't like unions, but I think IT workers need one. And don't be afraid to organize. You have rights.

Editorial standards