Business & Finance
04:12 PM

Exec Outlines Perils Of Offshore Outsourcing

Phil Friedman, president of Computer Generated Solutions, says companies are neglecting a moral responsibility to employees and could leave the United States without the skills needed to support its infrastructure.

How gloomy is the current IT job market? Computer Generated Solutions, a privately held technology services firm in New York, recently placed an ad to fill 300 positions at its newly opened research center. Having lived through the buildup to Y2K, during which IT firms scrambled to find enough staff to meet customer demands, CGS president and CEO Phil Friedman worried that he'd have the same problem this time around. Hardly. Friedman says the ads drew 3,000 applicants in just three days. "That tells me a story about where things are" in the IT job market, Friedman says.

Speaking about offshore outsourcing at an Information Technology Association of America lunch in New York on Wednesday, Friedman said that as an employer, he finds the phenomenon--blamed by many for rising IT unemployment--deeply troubling. "In the rush to send so many jobs offshore, we're neglecting our moral responsibility to employees," Friedman said. "We said we needed these skills; now we're abandoning these people." CGS maintains sites in India, but Friedman said it uses those facilities primarily to serve customers in Asia.

Beyond job losses, Friedman said offshore outsourcing could ultimately pose a major security threat to the United States. "Ten years from now we will not have the skills in this country to support our own infrastructure," he said.

Other panelists told stories that presented an equally dire picture of the IT employment outlook. Priscilla Tate, executive director of the trade group Technology Managers Forum, said headhunters she's dealt with are advising IT workers who've been unemployed for more than six months to switch careers. "There are people who have worked in this industry who will not get IT jobs again," she said.

The anecdotal reports are backed up by some grim statistics. According to a recent ITAA report, hiring managers say they will look to fill 493,431 jobs from May 2003 to May 2004. In 2000, U.S. companies hired 1.6 million IT workers domestically. At the ITAA lunch, Chris Israel, deputy assistant secretary at the U.S. Department of Commerce, said it's too early to blame all the job losses on offshore outsourcing: "We've yet to see a one-for-one correlation."

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