Largest Indian Outsourcing Deal Ever: Tech Mahindra Wins $1 Billion Pact From BT

[OhioChick]

The deal is the latest indication that Western businesses now view India's low-cost outsourcers as viable alternatives to global giants like IBM and EDS for comprehensive services engagements.

By Paul McDougall
InformationWeek

Dec 21, 2006 02:00 PM

India's Tech Mahindra has received the largest outsourcing contract awarded to a single offshore services company to date, securing a five-year, $1 billion deal to provide tech support to British Telecom and its business customers.

Under the agreement, Tech Mahindra will provide BT with internal IT support and will also act as a third-party contractor on some of BT's managed services accounts with business customers. Tech Mahindra said it plans to hire 3,000 to 4,000 employees over the life of the contract to help with the work.

BT owns a 35% stake in Tech Mahindra, which filed an initial public offering earlier this year. Tech Mahindra's shares on the Bombay exchange jumped 20% to 1,492 Indian rupees, or $33.44, on the news by the close of trading Thursday.

The deal is the latest indication that Western businesses now view India's low-cost outsourcers as viable alternatives to global giants like IBM and EDS for comprehensive services engagements. In July, European financial services firm Skandia handed India's HCL Technologies a deal worth $780 million, and last year ABN Amro tapped a five-vendor team of outsourcers that included India's TCS, Patni, and Infosys for a $2.2 billion contract.

http://www.informationweek.com/news/showArticle.jhtml?articleID=196701496

[rollopollo]

1. Strides

India has made enormous strides in the last ten years. A nation associated with poverty is now growing at 9%/yr. Poverty everywhere is bad, but you really haven't seen poverty if you haven't seen it in the third world. It is scary. Good to see that the third world isnt being written off based on old stereotypes, and that America is uplifting these poor populations by leveraging their native intelligence and skills. In twenty years, global Indian companies will be hiring Americans in America. The notion that the job pool is fixed is a false notion that has been disproved over the length of economic history.

[HughBeaumont]

2. "How did the other team feel?"

:eyes: :popcorn:

[rollopollo]

7. Good actually

US economy grew fast last year- over 3% real rate. And the unemployment is at a 5 year low.

Foreigners "stealing" American jobs grabs the headlines. The reality is that a high tide raises all boats. Throughout history, machines or foreign competition has replaced American workers: in agriculture, then in manufacturing, now in services. Every time it happens, people assume that there is a "fixed pie" of jobs and that unemployment will rise. And yet, new jobs are created, more people are working than ever, and gnp/capita increases. I worry about the wealth gap between rich and poor but this isn't the reason.

[HughBeaumont]

25. Aaaaaaaaaand OFF WE GO!!!

See, I had a nice morning off, but then you had to go and ruin it with silly and highly misguided right wing talking points about how great job offshoring is. Sigh.

You do realize that "more people are working than ever" only means the population grows and our birth-death rate figure rises to accommodate the new workers coming in/going out, right? Pray tell HOW many months this year have we met the 150,000 mark needed FOR this accommodation? Don't look it up, the answer is ONE. I should know because I keep monthly track of these things at my job. Also, you're not going to win brownie points with anyone quoting the highly-cooked UR, which is unreliable when you consider it doesn't track workers with multiple jobs nor does it take into account workers no longer on UI and have given up looking. Incidentally, you're statistics mean squat-ola to average American workers, who see no benefit from corporations, the GDP and Wall Street going gangbusters.

What about the ever-decreasing power of labor unions in this country - you know, those things which instituted all the rights workers have currently, and which the ownership class hates and skirts at every chance they get? What about the growing income gap between the wealthy and the middle classes? Have you ever read Perfectly Legal by David Cay Johnston, which outlines the Yellow-Pages sized tome of advantages/breaks/programs/loopholes the government offers to the wealthy to assure they'll forever stay that way? What about rising energy costs and taxes for oil wars that continually eat away at American salaries? What about the fact that for the first time in my state's history a worker making minimum wage would not be able to afford a one-bedroom apartment anywhere in Ohio?

Your Cavuto-esque argument also doesn't take in account the QUALITY of jobs Americans are attaining. Why exactly aren't everyday workers receiving the supposed gains you think they're getting? Please prove that offshoring has led to better jobs for Americans. Tell the real-life workers that got laid off for good at places like Boeing, Ford, GM, Proctor & Gamble, Stanley Works, etc, etc, etc, to simply "retrain, go to Community College" (a line of horseshit that's far easier said than done, see my journal for the reason). Tell me why workers in advanced fields have reported declines in pay across the board if we're reaping the benefits of this great economy. Can you tell me logically why, if we have such a strong economy, do we keep losing jobs in manufacturing and replacing them with lower-wage, almost zero-benefit jobs? A good economy should have the capability to employ EVERYone at a living wage, not just the heavily-degreed or educated (and there are MBAs that are getting fired due to cost-cutting).

I see you're one of those (like someone else I stuck in the Red X toilet recently) that plays the classic "xenophobia" card from the bottom of the deck. Doesn't that then assume that when you talk about "American Work Force", you're only talking about caucasian men and women? The American labor force is made up of hundreds of nationalities and races, and they're losing jobs right alongside us "evil white men" who just demand far too much compared to our foreign counterparts. :eyes: Why then, are there Indian Americans taking up the cause for the displaced workers here? I cannot find a good link, but pro-free-trade economist Robert Reich got bested by Sona Shah, a laid off Indian-American IT worker who's brother also lost his job, on CNN/Dobbs in 2004 using the same Cato-created theoretical arguments you're attempting to make. Here's more information on the human cost you choose to ignore.

Real people are being hurt permanently by this practice. Layoffs are unnecessary and demoralizing to the affected and existing workers. Often times, they never bounce back from their plights into an equivalent job comparable to the one they once had. What do you say to people like my cousin, who this August had to take a buyout from Packard Electric, which will last him only so long, or risk getting laid off for good because the plant will close? He has nothing other than a high school diploma. It's naive to think that at 35, he and his SO can just go to community college and start over. What would they do? Where would they get the money, go into more debt? Where would the experience come from?

They didn't used to have to worry about this sort of thing before. It used to be that we were able to gainfully employ people who aren't meant for college; these people were our industrial and manufacturing base and they built the quality products we used and bought. A strong economy should be capable of employing EVERYone at a fair wage regardless of education level, and when you cannot do that, all the talking points in the world aint'a gonna mask the reality that you do NOT have any such economy on your watch.

So don't come here spouting that "rising tide lifts all boats" nonsesne. I have personally experienced and talked to many workers who have long since realize that economists are merely puppet defenders of the capital of this country.

Go ahead, continue blaming the worker for his/her problem. It's THEIR fault they got fired, after all, right?

[OhioChick]

36. Damn Good Post as Usual, HughBeaumont!

Glad to have you as a neighbor. :)

[HughBeaumont]

37. It's like, where do these people come from?

How can ANYONE call themselves a progressive and at the same time support job offshoring and NAFTA? What good comes out of the destruction of one's livelihood? What good comes out of getting fired through no fault or choice of your own? What kind of bastard stunningly blames a worker for his/her misfortune? Do people think the workers should just "get over it and move on"? News flash, people. The pain from getting fired NEVER goes away.

And in some cases (like mine, for instance) it comes back to haunt you in the form of the person who fired you now working in the same place YOU do.

[antigop]

42. Great post, Hugh!

>>
How can ANYONE call themselves a progressive and at the same time support job offshoring and NAFTA? What good comes out of the destruction of one's livelihood?
>>

GREAT QUESTION!

And to think there were some of DU trying to defend Sten Hoyer's "progressive record" after he has voted for these trade pacts that don't have worker, human rights, and environmental protections.

Progressive? Yeah. Right.

[ChromeFoundry]

38. Spot on!

Great post- I agree 100%... This bloodletting of the middle class will be the demise of this county. Being in SW Dev., I see the effects daily in my field. This off-shoring and cheap labor in-sourcing right-wing mindset, that by satisfying the top 1% will drive better living conditions for the other 99% is complete bullshit. Never in history has this ever been the case.

[jollyreaper2112]

29. I don't mean to be rude...

Or maybe I do. You are a tool. The ownership class is pissing down our necks so don't you go telling us it's rain.

[OhioChick]

3. "Global Indian Companies"

are already beginning to outsource their work to other cheaper countries such as China. Indians are asking for more $$$$, so off the jobs go. The only way that I see Indian companies "hiring Americans in America in twenty years" is if we're willing to work for slave wages.

The reason that American corporations are "uplifting these poor populations" is the fact that it's cheap labor and saving them a bundle. Plain and simple.

[HughBeaumont]

5. You're kidding! I thought it was done out of sheer benevolence on their part!!!

:sarcasm: :rofl:

[rollopollo]

8. Their intentions...

...don't matter to me. I don't care if corporations are outsourcing to India because they like the way the country sounds or that they think its good Feng Shui. So they think its cheap labor. Fine. Jobs are created in India. More people are working in America now than when offshoring started. So beyond the "evil foreigner" stealing our jobs line...both countries are doing better since offshoring began.

[OhioChick]

13. I never made an

"evil foreigner" stealing our jobs line. However, I have no problem saying that "evil corporations" are shipping our jobs overseas. Don't turn this into something it isn't.

Your mantra sounds like something right out of the right-wing playbook. "More people are working in America now".........

Many people I know are working more.........2 or 3 jobs now.

[Lost4words]

27. You never said evil foreigner, I am a witness. I agree Evil Corporations.

or maybe just greedy which is Evil IMHO. Dont let this rolloporky get you upset I know exactly what you refering to, God Bless You OhioChick!

8643

[OhioChick]

40. Thanks

:)

[Lost4words]

26. More vast global statements,.... smells like sulfer to me.

so funny..........

[saigon68]

15. They are uplifting their populations

Of men especially by using cheap, worn out, jock-straps

[ChromeFoundry]

6. "Third World"???? WTF

Since when is India a "Third World" country?

Their military is ranked 4th largest in the world.
They have nuclear weapons.
Yearly Military Expenditure: $19,040,000,000
Available Purchasing Power: $3,699,000,000,000
Reported Gold Reserves: $145,000,000,000

So, I guess you think that Germany is "Third World" as well???? Please provide some facts to backup up this nonsense.

[rollopollo]

9. Here are facts that back up my nonsense

US GDP per capita: $42,000
India: $3,400

--Others--
China: $6,800
Mexico: $10,000
--

Get the picture?

[justice1]

10. Here are some other numbers.

Percentage of population living in poverty.

US 12%
India 25%

China 10%
Mexico 40%

There is absolutely no excuse for the US and Mexico to have these numbers.

[Dogmudgeon]

11. USA GDP of $42,000 per year? Hey, where's MY cut?

Oh, yeah.

It disappeared when my job was offshored to India -- and I was stupid enough to live in a country that does not provide health insurance to people with pre-existing medical conditions. All of which is due to a fanatical religion called Free-Enterprise Capitalism.

The idea that the USA has done so well in the face of offshoring isn't quite correct, either. The American economy hasn't kept pace with the world economy, and our currency has suffered a tremendous deflation since Li'l Boots came to power. Absolute employment has increased, but the level of employment has fallen significantly. Slightly more people are making significantly less money. That's not just from offshoring, it's from a spectrum of economic stupidity into which the destruction of the American technical work force figures large.

rollopollo, a lot of people are angry about the offshoring -- at least. We put years of intense effort into self-education and training and took significant risks. In my case, I made the decision to put off settling down and starting a family until I had a going career. In my case, the payoff was about four years of work with a fairly good hourly rate, but without perks. My health plummeted about five months after that last layoff. My bank account was drained within weeks and I watched my plans and my prospective future die. Maybe I should have responded to one of the two "ultimatums" I was given by girlfriends in the 1990s, and gotten married. I'm not even dating now, but that's the least of my concerns. On the other hand, most of the married couples I knew in the tech field are no longer together. Divorce is inevitable in a country where the measure of a man is financial success, and nothing else.

And many of us have found ourselves hoist on our own petards.

Many problems "peculiar" to America (such as its national religion, vide supra) contribute to all of this, but for most of us tech workers, we spent the better part of a decade preparing for the royal screwing of all time. I was in my mid-thirties then; I am 48 now, in poor health, and have not had adequate health care since 1991. So if we don't gush with love for Good Ol' Bharatiya, it's to be expected. Most of us are now either broke or broken to the masters' new bit, and we still don't hate Indians, even if some of us have gotten a tad protectionistic. We don't regret having learned how to program or to administer networks, but we do feel like suckers.

I have had many Indian friends, and friends of other nationalities, mainly H1b workers I met while on contract. Good for the Indians, the Pakistanis, the Bulgarians and Irish and Chinese and Brazilians and Basques and Filipinos who are now getting the work. But what about the USA? Our entire tech workforce has been subsidizing a few thousand "Captains of Industry" since the late 1980s, and there has been almost no payback except for a few good Clinton-era years.

Indeed, offshoring -- the process of moving work to countries where salary demands are lower -- has produced a tremendous wave of democratization throughout the world. But the manner in which this "democratization" took place has been a disaster, and once the pay scales start increasing in the low-rent countries, it is their tech sector who will have to fall on the sword. Just like we Americans have.

If it happened to Indians, you'd probably be appalled. Any of us would be. But it happened to Americans, and their spouses, and parents, and friends who have had to take in us nouveau-bums.

We are not xenophobes. We are simply and painfully fucked. Justice within the USA and around the world would demand that economic development proceed in the manner of a positive-sum-game, not a smash-and-grab money riot -- which is what we've brought ourselves.

When it hits India, I'm sure a few thousand Americans will "celebrate". But most of us, even those of us who lost our jobs to India, will probably then be saving our nickels for Indian Famine Relief, hoping our old pals' families and friends are spared the spreading disaster.

--p!

[liberalpragmatist]

12. Regardless of what one thinks about outsourcing...

... your post is a perfect example of the need for universal health coverage.

I'm not trying to change the subject - it's just that it's such a crucial thing. Even recent studies of the third world have found that the leading cause of poverty are health problems. A recent study in Bangladesh showed the there was a relatively small percentage of the population that was ALWAYS poor - many poor families were able to save, could afford to eat, making strides, but had savings wiped out by medical problems.

You can't have job security, economic security, any of it without providing frickin' health care to people. It's immoral.

[Lost4words]

24. I agree with you, our countries leadership has become immoral!

"You can't have job security, economic security, any of it without providing frickin' health care to people. It's immoral."

[Deja Q]

19. Democratization... Another DUer mentioned

that Indian men consider girls to be a liability. :wtf:

Google "Indian girls aborted" for all the evidence and more you need. :(

One hell of a democracy... :eyes:

Many Indians don't like the US either. (So why do they brazenly bite the hand that feeds?)

If the US values life, why are politicians getting chummy with people who don't value it. Especially when women are far more an asset than any puny superstition can ever fathom. Or, rather, when does the US tell other countries "Stop mutilating your own?"

But you're right; it is solely about the money and the Indians, soon if not already, will be in the same predicament as corporations move on.

Whatever happens happens, but without anything solid to go on, conjecture is all we can do. :(

[area51]

22. Great post.

:toast:

And liberalpragmatist, about the need for universal healthcare, so true. Nazi party members need to be called on this every day; not only are they anti-life for being against single-payer, universal healthcare, but by offshoring/inshoring American jobs, they are traitors to America, and the American poverty they create is no doubt leading to more abortions, which they claim to hate.

[Blue_Tires]

41. well said

nt

[saigon68]

14. you are on the wrong site

[OhioChick]

16. I thought that I was the only one who noticed!

:hi:

[saigon68]

20. I guess We are minds who think alike

Peace :-) :-)

[Deja Q]

18. If you mean "FR", many of them are pissed off re: offshoring too.

Maybe that poster needs to be on a different website... one that has nothing to do with America.

[saigon68]

21. Correct I would never send anyone to RIMJOB'S site

He and his Troglodyte army are beyond "The Pale"

[treestar]

33. This is like saying you don't even want to think

Not everything that is good for another country is bad for the US - we really don't know. You are only assuming it is bad for the US and that there is no possibility of economic growth of any kind - just a static number of jobs being moved around the planet at the will of the capitalist.

Maybe there is good news in that it is not so simple.

Ultimately you can't avoid freepers, either, how do you respond to their calling you "entitled" for thinking that these jobs are somehow "ours?"

If a company from another country invests here, I don't support you would say the Americans they hire are taking jobs from the natives of that country? Anybody who works in an IKEA should feel bad for taking a job from a Swede? In essence, that is what you're saying.

Why should all countries stick to themselves, just on general principles? What if people get richer if they invest in other countries?

[Deja Q]

17. Meanwhile, the United States is shrinking.

The positives to offshoring are obvious.

Why is the US being dismantled in the process; with the media then saying "The US is slipping behind" as if there's some big mystery going on?

Nation-building is one thing, but not at the cost of another nation. Not like this.

I am trying not to be cynical here, and I am happy to the Indians to a degree, yes. But so many talented Americans in so many fields are being left to rot.

And the psychological side-effects are crippling too.

Mind you, we've offshored to other countries before; even to Japan before China, and we're still here. But there is nothing to fill the latest gap, which is only increasing. That is where I have concern. What do people do in those 20 years before Indians hire us?

BTW: What happened to American pride? American built? Do we build anything anymore?

[Lost4words]

23. Yes the US builds legacy criminal politicians. n/t

We got yer Jeb we got yer George we got yer...............

8643

[treestar]

32. There might be something

The MSM would rather yank your chain than give you the news, especially the more abstract economic news like this.

We could be inventing/investing in new things. That just isn't so exciting and doesn't get everyone angry so the MSM has no interest.

It's perfectly possible.

[NoodleyAppendage]

4. Hmm...US forms India/US nuke pact and this happens the same week. Hmmm.

Sounds like the British just helped us out with a little quid pro quo to enhance our nuke posture in the region. Hedge against Pakistan being lost to radical Islam w/ nukes.

J

[robcon]

28. This is excellent news.

India's growth is the world's economic growth.

Globalization is a very positive trend for the U.S. and the world.

[jollyreaper2112]

30. troll

Troll.

[ChromeFoundry]

39. what are you smoking?

Show me ONE instance in history where this mindset has yielded any global benefit.

Inducing poverty, increasing unemployment, reducing health care, reduction on median wages for citizens of this country is hardly a positive trend! We'll see your stance on your right-wing talking points after you've been out of work for a few months.

P.S. membership on this site usually requires your head not be buried within another bodily orifices; i believe you are on the wrong site.

[treestar]

31. If India becomes more prosperous, won't its population increase

slow down. Then they will send fewer immgrants to the US. Isn't that wonderful?

Unfortunately, capital can go where it wants to. Only labor is restricted by where we can physically be.

[Tight_rope]

34. Thinking I need to move to India to get a good job!

[OhioChick]

35. Better Think Again...

Less number of US students coming to India for studies

Chalsa (WB), Dec 18: Less number of American students were coming to India for studies because of the "inordinate delay" in getting Indian visas, US embassy public affairs minister counsellor Larry Schwartz claimed here today.

"For some reason or the other, may be bureaucratic process, American students are not getting Indian visas while Indian students are getting US visas and all help to study in America," Schwartz said, addressing a three-day conference for Fulbright scholars in South Asia. "This year 30 American students could not avail Indian visas as they were issued very late," he said.

Another reason for less students coming here was the "interference" by Indian authorities in the choice of subjects of US students, Schwartz said.

He said delays in issuing Indian visas was "unfortunate", especially when indo-us ties were getting stronger. The Fulbright, would shortly open a centre at R.E.C at Silchar in Assam soon to cover more areas in the north-eastern region to help more students get opportunities to study in America, he added.

http://www.zeenews.com/articles.asp?aid=342876&sid=NAT&ssid=