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3/20/2006
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Now Hiring In India: Dell To Add 10,000 Workers, Capgemini To More Than Double

With heavy demand for its workers, will India be able to maintain its sizeable cost advantage over the U.S. in coming years?

Dell Computer and consulting firm Capgemini have become the latest tech powerhouses to publicly acknowledge plans to significantly increase headcount in India in order to tap the country's highly skilled, but relatively lowly paid, IT and business services workforce.

Dell could double its current Indian workforce of 10,000 over the next three years, a company spokesman confirmed on Monday. The Times of India and other Indian newspapers reported that company chairman Michael Dell announced the plan during a weekend roundtable with business reporters in Bangalore. Dell Computer will add the new positions "if the Indian market grows the way we believe it will," the spokesman said.

Dell currently has 1.7 million square feet of office space in use in the Indian cities of Bangalore, Hyderabad, Chandigarh, and Mohali. The build-to-order computer maker also plans to open a new, 1,000-seat contact center in the northern city of Gurgaon by year's end. Dell isn't just looking to offshore jobs from the United States to India. The company wants to increase headcount across Asia in order to support efforts to increase sales in the fast-growing region, the spokesman said. Dell's sales in India increased more than 21% in 2005, compared to the previous year.

The company is also hiring domestically. "We expect to continue adding to headcount in the U.S.," the spokesman said. Dell employs 26,000 workers in the United States, about 40% of its total workforce.

Also Monday, Paris-based consulting and IT services firm Capgemini said it has opened a new, 500-seat service center in the Indian city of Kolkata. The facility will act as a center for business-process outsourcing services, packaged software implementation, and custom application development.

Capgemini also operates development centers in Bangalore and Mumbai. The firm currently employs about 4,000 workers in India and is looking to add an additional 2,000 by the end of 2006 and another 4,000 by the end of 2007, bringing the total to 10,000.

Earlier this month, IBM said it was moving all development of consulting solutions based on service-oriented architectures to a new center in Bangalore. IBM officials said the company would likely raise its Indian headcount to beyond 55,000 over the next year--a 40% increase over current levels.

The spate of hiring by Western IT companies in India has prompted some observers to question whether the country will be able to maintain its sizeable cost advantage over the United States in coming years, given the rapidly growing demand for its workers. At present, wages for programmers in India range anywhere from 60% to 80% less than prevailing rates in the United States. And offshoring isn't without its risks. In 2003, Dell returned technical support for large business users of its Optiplex PCs and Latitude notebook computers to U.S. call centers from company-owned facilities in India. The move, a Dell spokesman said at the time, came after some customers complained about poor service.

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