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Corporate Dec 6, 2012

Believe it or not: IBM employs more Indians than Americans

By Uttara Choudhury

New York: American tech icon International Business Machines (IBM), which is known as "Big Blue", most likely now employs more people across India than in the United States - ifan internal document reported by Computerworldmagazine is correct.

According to the document, as reported by Computerworld(details here), IBM has 112,000 workers in India, up from just 6,000 in 2002. When contacted by Firstpost, IBM declined to comment on this document or say anything about the numbers.

IBM is understandably sensitive to criticism that its hiring spree in India could ratchet up the outsourcing debate at a time when US unemployment is stuck at 7.9 percent.

"There's little that is surprising about this data. It has been widely expected over the past year or two that IBM's India workforce was on track to exceed its U.S. workforce," said Computerworld.

"Crossing such a threshold is a symbolic shift more than anything else - a globalization footnote. With a global workforce of 4,30,000, less than a fourth of IBM's employees are in the US," added the US magazine.

'Big Blue' likely employs more Indians than Americans. Reuters

The last time that IBM made a public statement about its US workforce was in Congressional testimony in the fall of 2009 (here), when it put its US workforce at 105,000. It was at 121,000 at the end of 2007, and more in previous years. For the record, IBM no longer reports where its employees are located.

IBM in recent years has been known for using acquisitions in products such as cloud computing, analytics and consulting services to spark growth and improve profitability in a huge, mature company. IBM, which has an overall successful mix of products, is the company that others like Hewlett Packard secretly want to be, one where high-margin service and software businesses support big but slow-growing hardware divisions.

IBM's rapid acquisitions will continue to hold the key to its growth strategy at least through 2015. But the firm's growth also hinges on its winning formula to have large numbers of engineers and employees working in India or other low-cost countries, a thinning layer of highly compensated employees close to their clients, and factory like business processes. India is a crucial cog in the machine at IBM, which now runs large software programming and BPO operations in India.

According to the internal IBM document, the average annual wages for all IBM workers in India was at around $17,000. Although this is much lower than what American IT workers make, it is in synch with better IT wages in India.

In 2009, IBM created a buzz by launching a program called "Project Match" to help laid-off American and Canadian workers find jobs in India, China and other low-wage countries where it is still hiring (more here). American workers who leapt at the vacancies across the Atlantic had to move for local wages instead of generous expat salaries. Big Blue's "Project Match" initiative signalled the flattening of the world. But predictably, it didn't go down well with the unions.

"We hear a lot of talk about companies' offshoring and shifting work, but this is the first time I've seen a company encourage employees to offshore themselves," Lee Conrad, national coordinator for Alliance@IBM, had quipped.

IBM last year reported its full year Americas' revenues at nearly $45 billion, and total revenues at nearly $107 billion.

by Uttara Choudhury

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