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8/5/2009
11:00 AM
Bob Evans
Bob Evans
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Oracle, Protectionism, And The Myth Of 'Our Jobs'

In the context of the Obama administration's intent to punish companies for sending "our jobs" overseas, we recently noted that 70% of IBM's workforce and 40% of Microsoft's are based outside the U.S. Now, Oracle's latest financial results show that 61.3% of its employees are based outside of "the Americas," which means the percentage outside the U.S. is even higher.

In the context of the Obama administration's intent to punish companies for sending "our jobs" overseas, we recently noted that 70% of IBM's workforce and 40% of Microsoft's are based outside the U.S. Now, Oracle's latest financial results show that 61.3% of its employees are based outside of "the Americas," which means the percentage outside the U.S. is even higher.My point in highlighting those statistics (more to come below) is to continue to reinforce the global nature of today's economy, which requires that employers build global workforces deployed geographically to meet the specific needs of those individuals and their customers. Because many IT companies have revenues and operations outside the U.S., they present excellent examples of how global businesses require global workforces. These examples also underscore the sheer folly of the federal government's attempts to punish those companies for mapping their businesses to the global marketplace.

As we wrote a couple of months ago in a post called "IBM, Microsoft, And The Myth Of 'Our Jobs,' ":

Emboldened by President Obama's desire to punish global corporations for employing workers outside the U.S., the nativists are screeching once again about the ongoing threat to "our jobs." But that begs the question of just what exactly "our jobs" are: with 70% of IBM's employees based outside the U.S., and 40% of Microsoft's outside the U.S., just whose jobs are they anyway?

I'm asking these questions because from the piles of letters and comments that come in after every blog or column about outsourcing, offshoring, and the current administration's tendencies toward protectionism, it's clear that many IT professionals here in the U.S. are stuck in their misguided belief that because certain types of jobs were once plentiful and high-paying, then they will always be plentiful and high-paying.

Would it be nice if that were the case? Sure it would. Is that the case? No it's not. Is it productive to cling to the belief that these are "our jobs" and that the government somehow needs to protect them for us? No it's not. Quite the contrary - it is destructive and delusional. Businesses change, industries change, products and strategies change, old companies go away and new companies rush in - and as a consequence of that, jobs change as well.

In that context, take a look at how Oracle breaks down, across three global regions, its revenue and its headcount for the fiscal years 2008 and 2009:

--Americas: revenue grew slightly from $11.33 billion to $11.9 billion, but headcount dipped slightly from 32,608 to 32,347. Put another way, Americas' revenue went from 50.5% of the global total to 51.2%, while Americas' headcount went from 38.7% of the global total to 37.8%.

--EMEA: revenue and headcount were pretty much flat from '08 to '09: $7.945 billion to $7.948 billion, and 17,110 employees to 17,129. For 2009, EMEA accounted for 20% of Oracle revenue but had 34% of its workforce.

--Asia-Pacific: This is Oracle's smallest region but it grew nicely from 2008 revenue of $3.155 billion to $3.404 billion for 2009, with headcount increasing from 34,515 to 36,086. So Asia-Pacific revenue went from 14.1% of global total to 14.6%, while its headcount went from 41% to 42.2%. The significant imbalance between Asia-Pacific's 2009 revenue percentage -- 14.6% -- and its headcount percentage -- 42.2% -- is due to Oracle's decision to base much of its development work in Asian countries, and to build a significant overall presence in those geographies that it believes will provide the growth to fuel its future.

What then, again, are "our jobs"? They're surely not what they used to be, and they're surely not going to be helped by punishing U.S.-based global corporations like Oracle and IBM and Microsoft and any other corporation looking to create success for itself, its customers, its shareholders, and its customers. In fact, quite the opposite will happen, as we wrote with regard to Microsoft CEO Steve Ballmer's comments in early June when this issue flared up:

"We're better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.," Ballmer said in an interview with Bloomberg News. The Obama administration's efforts to limit deductions on foreign profits would lead to increased costs in the U.S. for Microsoft, requiring Ballmer to fulfill his "fiduciary responsibility" to shareholders by lowering the company's costs by shifting jobs to other countries with lower corporate tax rates.

"Our jobs"? Not any more.

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