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Offshoring Essay

659 words - 3 pages

Jane Harding, considered a proposal to shift 3,000 well compensated computer programming jobs from the US to existing company locations in China, India, and Brazil.  Harding, senior VP for Human Resources in the Global Services Division (GSD) of Global Information Systems, Inc. (GIS).  GIS had 2003 revenues of nearly $90 billion.  GSD accounted for about half of GIS’s total revenues and an equal fraction of its total profits.  It also included more than half of the company’s 315,000 worldwide employees.
A significant portion of GSD’s business came from customers outsourcing their business-process needs.  GSD signed multiyear contracts with customers.  Most of these long-term contracts were ...view middle of the document...

 
Company Economis of Offshoring.
To accommodate growth, GSD had established its own programming centers in Bangalore, India; Shanghai and Dalian China; and Sumare, Brazil.  Now GSD would be going a step further-instead of taking business growth offshore, the new proposal would begin reducing the US headcount for programmers involved in this activity and moving existing US jobs offshore.
The savings from this proposed move promised to be significant. The total cost per year in the USA was 336 millions and offshore was 75 million.  That difference is 261 million dollars in savings.  The first year they would lose around 19 million dollars due to other incremental distance costs, severance costs and savings delay/overlapping costs and transition costs.  The next year they would gain $40 million in saving and from there on out, due to the severance costs and saving delays/overlapping costs would end, the company would save $168 million from there on out.
Info Systems Office fell under the Central Corporate and Financial Ops. which was run by...

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