Silicon Valley hit by outsourcing protests

A two-day conference instructing companies on moving technology jobs and other work overseas drew picketers, in one of the first San Francisco Bay Area protests over a growing trend that's shaking up the entire computer industry.

A group of about 50 labour organisers and out-of-work techies gathered at 8:30 am on Tuesday in front of the Hyatt Regency hotel here, where conference organiser Brainstorm Group is holding its Nearshore and Offshore Outsourcing Conference this week.

The one-hour demonstration was organised by a chapter of the Communications Workers of America (CWA) union. Picketers held signs that read: "Stop Off Shoring!" and elicited honks of support from drivers passing by on Bayshore Highway.

"It's time for us to come together in solidarity because jobs are leaving California and the United States like never before and it's because of outsourcing," Cary Snyder, an unemployed hardware and systems engineer, said in a speech to the crowd.

The exodus of information technology jobs out of Silicon Valley and the US to foreign countries is certainly on the rise. Forrester Research estimated that the number of US computer jobs moving overseas will grow from about 27,000 in 2000 to more than 472,000 by 2015.

The Bay Area is ground zero for this trend, with companies here, including Sun Microsystems, Oracle and Hewlett-Packard, among those leading the way with plans to increase their staff in countries such as India and Russia. Those countries have cheap, plentiful and highly skilled labour markets. They also have more relaxed environmental and labour regulations than in the US and Europe, said a representative of the Silicon Valley Toxics Coalition, one of the speakers at the protest.

And tech companies aren't the only ones looking to trim costs by tapping foreign labour markets. According to research firm Gartner, more than 300 of the Fortune 500 firms tap IT services companies in India to run their data centers and call centers.

Executive interest in the annual outsourcing conference, which is in its fourth year, has only grown, said Gregg Rock, president and founder of Brainstorm Group. About 250 local businesspeople are attending the conference this week, which is double the number from two years ago, Rock told reporters in the Hyatt lobby after the protest.

Brainstorm Group held an outsourcing conference in Chicago in April and has another one scheduled for New York in November. Rock said Tuesday was the first time protesters had ever targeted one of his events.

He said he empathizes with those who have lost jobs but that there's no turning back. "The genie's out of the bottle on offshore outsourcing," he said, adding that three per cent to four per cent of IT budgets nationally are already earmarked for foreign labour.

It's up to the government, not businesses, to handle the fallout of this shift, Rock said. "Businesses will go the path of least resistance and greatest savings."

Like the related concept of economic globalisation, offshore outsourcing has become a controversial issue in recent years, drawing rancour from activists and displaced workers. Others, particularly businesses, either sing its praises or view it as an unavoidable economic reality.

But the issue is not a new one, even in the IT industry. Many US companies began turning to India and other countries in search of computer programmers for their Y2K projects and again during the dot-com boom, when workers with computer skills in this country were a scarce resource.

Now, with unemployment in the US lingering at decades highs despite recent indications that the economy is pulling out of its global slump, the outsourcing debate has grown louder. The exodus of IT jobs to other countries, according to analysts, is exacerbating, if not causing this painful new phenomenon known as the 'jobless recovery'.

"Offshoring is really destroying the community here," said Shelley Kessler, a representative of the Central Labour Council of San Mateo County. "Shame on these corporations for the things they're doing."

Labour unions face an uphill battle gaining a foothold in an industry that has been indifferent, if not hostile, to organised labour.

"Unions are the answer for sure," Snyder said. "It's time for white-collar workers to join the blue-collar workers and protect our collective interests."

Alorie Gilbert writes for CNET News.com