Slashdot Log In
Apple Pulls Out of India
Posted by
Zonk
on Sat Jun 03, 2006 08:27 PM
from the curious dept.
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."
Related Stories
[+]
Developers: IBM the Next Great Software Company? 132 comments
Diomidis Spinellis writes "A report in this week's Economist discusses IBM's globalization strategy and the company's presence in India. Refreshingly, the article admits that there's more to outsourcing than cheap labor, contrasting IBM's calculated investments with Apple's rapid pull-out from Bangalore. Although the jury is still out on how sluggish multinationals can compete with vigorous tigers, it seems that IBM has a credible strategy for becoming the next great software company, and that outsourcing is only a part of the puzzle."
This discussion has been archived.
No new comments can be posted.
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
we were wondering too (Score:4, Insightful)
Last paragraph of the article, from an India employee losing his (or her) job:
Yeah, there are a lot of U.S. employees familiar with that feeling. Welcome to the global market.
Personally, I find it just as offensive companies whimsically shift work forces, often at high personal and financial cost to employees caught unawares, whether it be in the U.S. or India. I'd like to say, "see how it feels?", but I find no satisfaction in that. I guess the global economy does apply globally. It really does become about money on ledger sheets, and little about the workforce and impact on people just trying to make a living. Meanwhile CEOs and other execs reap massive rewards, usually with little relationship to how well their company does because of these decisions.
(That said, the article is far too short on detail to understand exactly what prompted and triggered the change in plans for Apple.)
Re:we were wondering too (Score:5, Interesting)
Parent
Re:we were wondering too (Score:5, Funny)
That's like Associate VP. I mean, A 16-bit slashdot id... looks like you're doing great work :)
Parent
Re:we were wondering too (Score:5, Funny)
Parent
Re:we were wondering too (Score:5, Insightful)
Parent
Re:we were wondering too (Score:5, Funny)
I'll say it for you then. See how it feels?
Parent
Re:we were wondering too (Score:5, Informative)
Back on topic: There was an article in Crain's Chicago Business a couple of weeks ago saying it's hard times for the Indian outsourcing industry because wages in India are on the rise.
Parent
Re:we were wondering too (Score:5, Insightful)
AIK
Parent
Re:we were wondering too (Score:5, Insightful)
Of course wage convergence isn't a bad thing- so long as it converges up, increasing the standard of living in the third world while not hitting the first too badly. It doesn't seem to be going that way though.
Parent
Re:we were wondering too (Score:5, Interesting)
Parent
Re:we were wondering too (Score:5, Interesting)
Parent
Maybe that's your own damned fault? (Score:5, Insightful)
EXCERCISE SOME FISCAL RESPONSIBILITY! If you make $120,000 a year and are one mortgage payment away from being on the street, it's because you're being stupid with your money.
Parent
Re:Maybe that's your own damned fault? (Score:4, Insightful)
Or, you live in California.
Parent
Re:Maybe that's your own damned fault? (Score:4, Insightful)
There are some problems though.
95+% of the people around you do not. They think that you are crazy. In some jobs sectors it is consirered to be essential to maintain some "class" and it may be very detrimental to your career to be different. Most of banking, finances and consluttancies are angaged in an endless penis measurement contest and it takes some guts and thinking to avoid getting into it or maintain financial discipline. This is especially true if you are a few steps above the bottom of the corporate ladder, high enough for the penis measurement to be in full swing, but too low to have the finances to afford it.
So as a matter of fact, the culture of the industry sector and the employer need to be taken into account when looking at a salary. 50Kpounds in a "plain IT" or "plain Telecoms" in old Blighty are a reasonable amount of money. 50Kpounds in the banking industry or most consluttancies are peanuts. You will either have to stay one payment away from being thrown out onto the street or you will have to cut somewhere on the "perceived class". In the latter case you essentially volunatrily put yourself on the list of the "first ones to go when the times get tough".
Parent
reading comprehension - massive rewards (Score:5, Insightful)
Mr Jobs just sold $295,000,000 worth of Apple stock.
In 1992, CEOs held 2 percent of the stock of US corporations, nowadays they own 12 percent. In less than 15 years, CEOs (not including other executives, just CEOs), have 'earned' themselves 10 whole percent of corporate America. If the division of pay were entirely fair and equitable, Steve Jobs and his fellow CEOs must be responsible for exactly one tenth of all the wealth created by anyone at all who works for a large corporation.
Parent
Re:India has a huge problem though.... (Score:5, Insightful)
Because being paid above-average Indian wages in India will buy you a better standard of living than average or below-average wages in America?
I'm from the UK, and I recognise that although, on exchange rate terms, I could probably get a higher income by working in the US, the extra costs (including social costs) would probably cancel out most, if not all, of the benefit. Of course, the smart thing is probably to work in the US for a short period of time, save as much as possible, then either retire in a cheap part of the world or use your previous highly-paid employment as evidence that you should be as highly-paid in a cheaper part of the world. That all sounds like a bit too much hassle for me, though...
Parent
They were out sourced (Score:5, Funny)
Re:They were out sourced (Score:5, Insightful)
Given Apple's history with outsourced phone groups (burned by SEI's horrible quality and retention in the mid-90s), I sincerely doubt it.
Apple probably saw that this approach wouldn't meet their quality goals. That's not a slam on Indians or outsourcing, but AppleCare and Apple in general is extremely sensitive to quality and customer satisfaction. 1995-1997 is still very fresh in their minds.
Parent
Re:They were out sourced (Score:5, Funny)
Parent
Damn conservative society... (Score:5, Funny)
severing one's package (Score:5, Funny)
Parent
30 people (Score:5, Interesting)
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?"
Sounds pretty harsh to me (Score:5, Insightful)
"On May 15, Apple officials addressed us and were highly appreciative of the workforce and the task it would execute in India. I wonder why they never said anything even then," said another fired employee.
Seems pretty cold to me. In a lot of developing countries like this a job at a major multinational serves to support not just the family but the entire extended family. No doubt some of these people even had to quit other jobs to join Apple, and can't return. I worked many years for the international division of a large multinational and saw first-hand the culture of abusing foreign workers because management knew they could work them 14 hours a day and the people couldn't say or do anything about it. And since these people are all classified as "professionals" no one can swoop into the factory to blow the whistle, you have to work whatever overtime is demanded of you, for free. Pretty crummy if you ask me.
Buzzword (Score:5, Funny)
Maybe they realized they made a mistake. (Score:5, Insightful)
It wasn't cost, so was it quality? (Score:5, Insightful)
Sadly I bet Apple found... (Score:5, Insightful)
Stuck on .NET and Windows (Score:4, Informative)
no comfort (Score:5, Funny)
There's no such thing as job security through obscurity.
It's a joke, laugh.
Parent
Re:Stuck on .NET and Windows (Score:5, Interesting)
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.
Parent
say what? (Score:5, Funny)
The person that wrote this has never dealt with Indian tech support I take it.
Re:say what? (Score:5, Interesting)
Parent
What? (Score:4, Funny)
simply cost and quality related (Score:5, Interesting)
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.
I have run across a good number of ... (Score:5, Insightful)
I know our last 2 contractors had to go through a two week trial period at the agencies expense and we kicked both of them back. We probably get just as many bad American contractors, but the whole point of exporting jobs or importing workers was that we gain talents that aren't available here at a lower price. If their skills and education are all suspect and have to be verified at a greater expense and difficulty than local talent why bother? Apple probably found the same thing.
an employee's market (Score:4, Informative)
So maybe some of that factored into the decision to cut and run. I guess the true story will come out eventually.
Let the outsourcing stop, no not because of that! (Score:5, Interesting)
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.
Outsourcing (Score:4, Insightful)
In industry generally you outsource when you have a large batch of work to do and you don't want to ramp up inhouse. In the software business this generally means finding someone to churn out mountains of code.
The resulting mountains may look good on the monthly sloc metrics but its not what you want to see as an engineer. If a programmer comes back to me and says he made the required changes and produced negative 200 lines of code I would be happy.
One reason that a company like apple might decide not to proceed with something like this is that mass production is not really what they are looking for.
I don't have any problems with India specifically and I think we are going to see more of this situation where the large packages of work, which are less interesting for me anyway, going off shore.
Parent
RE: Apple Pulls Out of India (Score:4, Funny)
I hate high-level jobs. (Score:5, Informative)
Because employees would react. If they said "we're thinking about closing" or "things aren't working out as expected" then at least a few employees would just bail, or worse. No company wants that -- if there is a chance to salvage the situation, then they would prefer the employees never even knew how close they came to being laid off. Especially if a few employees leaving could damage the potential turnaround. And if there is no chance to salvage the situation, then they want those employees to still be around long enough to finish whatever needs finishing.
I'm not suggesting that how corporations treat employees is good. I'm just telling you what the thinking is. In fact, I hated that thinking so much that I quit my first high-level job. I'd been a manager of Web teams for most of my career. I got a job with Sabeer Bhatia (the Hotmail guy), and he brought me on as a Director. I sat in all/most of the upper-management meetings. I heard all sorts of private discussions, not meant for the rest of the employees. I knew when the product had serious issues that would hurt our funding. I knew when there was trouble with an investor. I knew when the management team was in conflict. It was never a good idea to let employees in on the issues. I learned that quickly. The first few times there were issues, I took my team to lunch and let them know. You cannot believe the fallout, swift and sure. I grew to hate it. I had to lie to employees when they would ask about rumors. I was supposed to have been doing that all along, anyway (well, maybe "lying" is too harsh because I'm bitter about it, I'm sure a more seasoned person would have simply said "none of your business" to every single rumor or TMI kind of question -- but for me, that just gets uncomfortable when you know the person has a family and will be out of work in a month). Eventually I quit. At my next job, the hiring manager was curious why I was going for a job as a manager of a small team when I was clearly moving up into Director & VP level work. I realized I'd rather be with the rest of the employees, not knowing about the sheer volumes of crap that hit the fan daily.
As I get older, I get better at things, of course. I'm self-employed now, and I have a subcontractor for the times when the work is too plentiful. If I don't have work for the subcontractor, I just say so. If he ends his business relationship with me due to it, I'll deal with that. I try not to make too big a deal out of anything. But I'm also not running a company with 10,000 employees. If things go bad for me, the impact is tiny.
tech support too? (Score:5, Interesting)
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.
Re:$40 (Score:5, Informative)
No.
I am a developer in India. All my college buddies are too. Not one of us gets less than $800 per month. And that's the 'entry level' for our number of years(3) in the industry.
Parent
Re:$40 (Score:5, Insightful)
Uh, before you brag too much, you might want to check this [worldbank.org] out.
$800 a month in India is more than 3 times more than the income of an average person in India.
$732 a week is only 20% higher than the average Canadian. So imagine making 3 times more than you do right now, and you'll have some idea of how well that guy's doing in India.
That's why outsourcing is so popular. In theory, companies can hire 4 people in India for the cost of one co-op student here. And to top it off, all 4 of the Indians will be living like kings.
Parent
Re:Payback's a bitch (Score:5, Interesting)
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.
Parent
Re:Payback's a bitch (Score:5, Insightful)
There is absolutely nothing that entitles you to get a tech job. The Indians can do the same job you do at a much lower cost. I know if I was your boss, I would probably say something like... "Thank god the racist prick is out on the street where he belongs."
So now objecting to my job moving overseas is racist? I don't care what race the guy who's doing my job is. I'm opposed to sending the job where I can't follow.
Parent
Re:Payback's a bitch (Score:5, Insightful)
Parent
Re:Payback's a bitch (Score:5, Insightful)
Well, AC, you know what? In today's global marketplace, nothing entitles you to keep your tech job for longer than three months if your corporate benefactors have a mood swing. Welcome to the party, glad you're here, let me take your coat.
Last number of years, Americans working in tech have had the blade of Indian outsourcing dangled over their heads, customarily as blackmail to force longer hours on fixed salaries. When there's just no more blood to be squeezed from the stone, boom, time to pack up, lay off and ship.
Meanwhile - and I'm saying this from experience working for a large American telecom that fired damned near everybody a few years ago to restock with cheap Indian labor - the Indians coming in would take all this as a show of cultural and intellectual superiority over us pampered, lazy Americans. Not all Indians, but certainly more than enough to carry the stereotype. We Americans have spent the last five years being barely tolerated by Indian coworkers touting the "get used to it, global economy, cheaper and better" dogma.
Now suddenly you're starting to sound like union men! Think it's shitty that Apple changed their minds? I've read other comments in this story pointing out that folks in India have extended families to care for, that they probably had to quit jobs they couldn't get back, etc etc etc. Well, the knife cuts both ways.
You guys weren't being aggressively competitive. You guys were simply used. We know how you feel.
Thing is, as we had to explain to our families why our jobs were being sent overseas, we knew the cold truth that you guys are learning now. It was never about better, or even about as good. It was about being okay while being cheaper. A lot cheaper. Period. Corporations did it because it's easier to look competent short term by cutting costs than by increasing income, and the unfortunate truth is that the American economy right now is still pretty much driven by cost cutting. It was also inevitable that, sooner or later, the incentive would begin to evaporate as those outsourced employees started asking for more money.
A few years ago Dilbert did a strip where our boy tells PHB, "I have some disturbing news. We outsourced our customer service function to India a few years ago. Apparently, they subcontracted the job to Mexico. Then Mexico subcontracted to Vietnam, who subcontracted to the Philippines. . .. who subcontracted it to us. It turns out that we're the lowest-cost provider, because we lie about our hold times. In summary, we pay ourselves to hose ourselves. Are you thinking what I'm thinking?"
PHB: "We should raise prices?"
That's it in a nutshell. Again, welcome to the party - chips and dip are in the corner.
For the record, I agree that doing a three-month cocktease in India was a shitty thing for Apple to do. But then, so was bottom-dollar outsourcing it to begin with. Live by the sword, die by the sword.
Parent
Re:The real reason... (Score:5, Funny)
Thank God for Mississippi.
KFG
Parent
Socialism??? (Score:5, Insightful)
Actually most of the European policital forces usually mislabeled as 'Socialists' or even 'Communists' by US right wingers are actually modern Social Democrats who have become moderate to the point where they generally do not see a conflict between a democratic society with a capitalist market economy and their own goals which in turn means they have very little in common with Marxism, Communism or classical Socialism. To call political parties like the British labor party or even the German PDS/Linkspartei Socialists would actually be considered an insult by a true die-hard Socialist.
Parent
Re:Apple wanted to stay in Cupertino (Score:5, Interesting)
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.
Parent