IBM Attracts Towards Indian Employee
IBM's success in recent years is clear from the numbers - an upward ascent
in profits, profit margins, stock-market value and even research and development
spending. But there is one number IBM stopped disclosing a few years ago: the
company's employment in the United States. The last time IBM broke out its
American payroll numbers was in 2008, for the previous five years. From 2003
through 2007, the company's worldwide employment grew by 21% to 386,558, while
the headcount in the United States declined 11% to 120,589. Data submitted as
part of Congressional testimony indicated the downward trend in American
employment continued, at least through 2009. IBM still reports its global
payroll, which increased to 426,750 in 2010.
The last time IBM broke out its American payroll numbers was in 2008, for the
previous five years. From 2003 through 2007, the company's worldwide employment
grew by 21% to 386,558, while the headcount in the United States declined 11% to
120,589. Data submitted as part of Congressional testimony indicated the
downward trend in American employment continued, at least through 2009. IBM
still reports its global payroll , which increased to 426,750 in 2010.
IBM, undoubtedly, stopped disclosing its American employment because the trend
was an invitation to criticism. But the decision, while understandable, was a
shame, I think. IBM, in a way, is a microcosm of the American economy -
certainly the high-tech economy.And IBM's decisions on what kind of jobs stay in
the United States and what jobs go abroad is a case study of a company at the
forefront of globalization. Its experience may well hold lessons for the
American economy, companies and workers.Take one example. IBM has massively
increased its employment in India in the last several years. Some estimates
place IBM's Indian work force at more than 100,000. That would probably place it
on a par with IBM's employment in the United States.
IBM notes that India is a fast-growing market for the company, and that it is a
rich source of skilled engineers. But lower labor costs in India, of course,
have been a major motivation. IBM's big business services faced the same kind of
challenge from Indian outsourcing companies like Tata Consulting, Infosys and
Wipro that low-cost computers, based on microprocessor technology, meant for
IBM's mainframe business two decades ago. Then, IBM was slow to respond, and
nearly collapsed . The company's worldwide payroll dropped by nearly half, to a
low point of 217,000 in the mid-1990 s. Samuel J. Palmisano, who became chief
executive in 2002, was determined that the services business would not repeat
the mistake of the mainframe business. A big part of IBM's India strategy was to
change the economics of the company's services business on its own terms, before
rivals did. IBM is still probably the largest private employer of technology
workers in the United States.