High-End Technology Work
Not Immune to Outsourcing
By STEVE LOHR
 n
the debate over high-technology work migrating abroad, there has been
widespread agreement on at least one thing: the jobs requiring higher
levels of skill are the least at risk.
Routine software
programming and testing jobs, analysts agree, are the ones most
susceptible to being grabbed by fast-growing Indian outsourcing
companies. By contrast, the people who devise the early blueprints for
projects - the software architects - have been regarded as far less
likely to see their jobs farmed out. But Microsoft
contract documents show that as far back as 2001 the big company had
agreed to pay two Indian outsourcing companies, Infosys and Satyam, to
provide skilled "software architects" for Microsoft projects. The
documents were obtained this month by WashTech, an organization of
technology workers based in Seattle, which gave copies to The New York Times. "The
policy prescription you hear from people again and again as the
response to the global competition of outsourcing is for Americans to
move to high-end work," said Ronil Hira, an assistant professor for
public policy at the Rochester Institute of Technology. "It's important
to dispel the myth that high-end work is immune to offshore
outsourcing." "What is not clear," Mr. Hira added, "is how much of that high-end work will go abroad." A
Microsoft spokeswoman, Stacy Drake, said that as a matter of policy the
company did not comment on individual contracts with suppliers. But,
she said, "we often use outside companies for projects." The
outside contractors, Ms. Drake said, are used to bring in specialized
expertise Microsoft may not have internally or to bring additional
technical support to a project. Still, Ms. Drake said, building the "core intellectual property" in Microsoft products is left to full-time company employees. Though
definitions vary, software architects are highly skilled workers who
often earn six-figure salaries in the United States. The Microsoft
contracts with Infosys and Satyam show that the work of software
architects, senior software developers and software developers was
being done by employees of the Indian companies working at Microsoft
facilities in the United States. Their work did not come cheap
for Microsoft, which was billed $90 an hour for software architects, or
at a yearly rate of more than $180,000. Senior software developers were
billed at $72 an hour and software developers $60 an hour. The
on-site work, said Mr. Hira, an expert on offshore outsourcing, is
usually done by Indian software engineers who come to the United States
on H-1B visas, which allow foreign workers to be employed in the United
States for up to six years. The Indian workers themselves are
paid a fraction of what their employers collect. The top annual
salaries paid by Indian outsourcing companies to Indian software
experts working in the United States range up to $40,000 or so, Mr.
Hira said. The contracts also say that for short stints of work,
less than 90 days, Microsoft will pay for round-trip economy airfare
for travel between India and the United States. The contracts
also include work done in India, by project managers and by software
development and testing engineers. The billing rate for this work
ranges from $36 an hour to $23 an hour. A spokeswoman for Infosys said the company did not comment on its contracts, and a Satyam spokesman could not be reached. Critics
of the outsourcing trend regard such agreements with Indian
contractors, with work done both in the United States and in India, as
a step toward shifting more and more skilled technology jobs overseas. "Microsoft
has hired vendors whose whole reason for being is to transfer work
offshore," said Marcus Courtney, president of WashTech, an affiliate of
the Communications Workers of America. The foreign competition
for work at Microsoft, Mr. Courtney said, will help the company's
management put more pressure on wages for its American workers and
reduce employee benefits. Last month, Microsoft announced that
it planned to cut costs by an estimated $80 million a year by trimming
prescription drug benefits, tightening parental leave policies and
making it more expensive to buy Microsoft shares through the employee
stock purchase plan. Despite its use of foreign contract workers,
Microsoft expects to add 3,000 to 3,500 full-time employees to its
United States payroll of 37,000 in the fiscal year that ends in July.
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