Apple Sends Jobs To India. Good Or Bad?

When I first read in the news that Apple was sending jobs to India, I thought it was Steve Jobs going on a vacation. Wrong.

Apple has plans to hire 3,000 technical support and researcha and development personnel in Bangalore, India.

I have an acquaintence from India who struck gold with an internet company in Silicon Valley during the dot com bubble years in the late 90s.

With his earnings (“earn” is stretching it; it was more like “earning” money in Las Vegas) he started a large call center operation in his home in Bangalore, India.

Today, his company employs nearly 2,000 workers; college graduates, all proficient in English. His target customer? US companies. The customer list includes American Express, CitiBank, and others.

This should not come as a surprise that Apple wants R & D and tech support in India. The country has one of the fastest growing economies in the world.

Colleges and universities in India churn out more engineers than similar institutions in the US, UK, France, and Germany combined.

Call center operations in the US don’t pay well and get workers to match. Similar positions in India are filled with the middle class; college grads fluent in English, who are willing to work for half to one third their US counterparts.

Apple wants to take advantage of the lower labor cost and high technical competence.

India is also a large market for Apple products.

Bangalore is a popular technical center for foreign investment.

Apple now joins the ranks of Dell and other technology companys (is Dell really a “technology” company?) in outsourcing American jobs to India.

News reports indicate Apple may have as many as 1,500 employees in India by the end of 2006, with 3,000 on the payroll by the end of 2007.

Why is Apple doing this? Money. R & D is a big expense for Apple, much of it located in expensive US locations with relatively expensive US employees.

Will Apple lay off American workers and transfer their jobs to India? The polite term is offshore relocation, but it’s really “fire here, and hire elsewhere.”

Apple is certainly not the first American-based company to outsource jobs to India. Microsoft already has a large base of technical personnel in India.

What happened to Think Different? Isn’t Apple really just thinking like everyone else? Cut costs, save money, move jobs, make more money.

Formal economic terminology notwithstanding, I once heard a definition of the difference between a recession and depression.

“If you’re out of a job, it’s a recession. If I’m out of a job, it’s a depression.”

Apple employees have worked hard for the past few years helping to turn around the company’s fortunes. Mac sales are growing faster than industry averages.

Apple is at the top of the portable music world with the iPod, iTunes, and iTunes Music Store ecosystem.

Profits, sales, stock, and cash in the bank are all at record levels.

What’s the reward for Apple employees? Their jobs may end up in India and they’ll end up at the local unemployment line.

Will Apple’s highly touted customer service be reduced in quality? What new products could be expected from an R & D center so far removed from Apple headquarters in Cupertino, CA?

Of the potentially 3,000 jobs to be created in the next year or two, how many are high paying technical jobs, vs. lower paying customer support jobs?

I’m sure many Apple employees will lose their jobs with this move, I’m not convinced the company has the best interest of employees or customers in mind.

What is Apple truly concerned about regarding the future? Shareholder value. It’s the same with all public companies. Apple’s stock is langquishing a bit after a few record runs.

The company must take steps to improve profitability, lower costs, and introduce more unique products. Why? Stock price. The company believes a move to India may help that strategic goal.

Perhaps, but it’s not thinking different.