Originally created 12/15/03

Carolinas companies increase exports of white-collar jobs



CHARLOTTE, N.C. -- Big companies ranging from financial giant Bank of America to Matthews discount-store chain Family Dollar are increasingly exporting white-collar jobs to countries where labor is cheap, a survey by The Charlotte Observer found.

Nearly two-thirds of the largest companies headquartered in the Carolinas - 17 of 27 - say they have sent computer tasks abroad, mostly to India, The Observer reported Sunday.

Among 100 of the largest public companies in North Carolina and South Carolina, the newspaper found that 25 say they have used the strategy.

Charlotte-based Bank of America eventually expects to employ about 1,000 people at the center it plans in India. Family Dollar has programmers in India modifying sales software.

Greensboro's VF Corp., the maker of Wrangler jeans, has an Indian help desk for workers with computer problems. South Carolina utility SCANA has done software work in India since 1996. Charlotte's Presbyterian Healthcare hired an Indian firm in Bangalore last year to help redesign its intranet.

Workers abroad also process mortgage applications, read X-rays, prepare tax returns and staff customer call centers.

Frances Queen, chief executive of Charlotte computer-services firm Queen Associates, said she lined up a team of programmers in Russia after customers increasingly sought lower-paid software programmers overseas instead of hiring her company.

"Offshore is becoming expected," she said. "You have to offer it to be competitive."

The move abroad - often called offshoring or foreign outsourcing - echoes the loss of manufacturing jobs to low-wage countries.

With the Internet, many computer jobs can now be done anywhere, often for a lot less money.

Supporters say the move abroad saves billions, gets work done faster, resolves labor shortages and frees U.S. employees for more creative work. Critics say it's eroding the middle class and wiping out America's future.

The white-collar exodus could put more than 10 percent of the U.S. work force - more than 14 million Americans - at risk of losing jobs to foreign workers, according to a study by the University of California at Berkeley.

"Everything is up for grabs, and the low-cost bidder wins," said Marcus Courtney, president of WashTech, a union for white-collar workers. "Where are you going to be able to get a job and build a secure economic future?"

U.S. companies began tapping technology talent in India in the 1980s, but it was Y2K concerns - the need to retool computer operating systems to ensure they'd continue operating after the year 2000 - that taught Corporate America it could move more than factory jobs overseas.

SCANA, owner of Gastonia's PSNC Energy and S.C. Electric & Gas, was a front-runner in outsourcing abroad.

The Columbia, S.C.-based company typically turned to computer services contractors so it didn't have to hire and fire as workload fluctuated. In 1996, a contractor bidding on a complex project said the company could save money and turn the job in half the time by using workers in India.

Randy Senn, SCANA's chief information officer, took a chance and had been working with Indian programmers lined up by Michigan-based Covansys ever since.

Senn said SCANA saves about 40 percent over the cost of doing the work in-house. "I didn't think it would work. It's part of our strategy now," he said.

Bank of America began outsourcing to India early last year with a few test projects, including building prototypes for Web sites.

"We got interested first because we heard that there were significant cost savings," said Tim Arnoult, the bank's technology and operations executive. "This is basically true. However we also found that the quality of work was very good, we could gain speed-to-market advantages, and it was a very effective way to staff special projects."

Typical offshore work now includes developing, testing and modernizing software. The Charlotte bank gets about 20 percent of its software work done offshore and expects to continue at that level, said Mary Waller, senior vice president of media relations.

The bank, which would be the nation's second largest by assets after the pending FleetBoston merger, says offshore outsourcing has saved it $10 million.

Now it is expanding with a subsidiary in India, set to open in Hyderabad in April, that will handle a wider range of work as software projects continue going to outsourcers. The bank won't give specifics about work intended for the center.

Bank executives said they expect the Indian unit will employ less than 1 percent of their 133,000-member work force.

The bank can't quantify offshore-related job losses because it doesn't track the reason for job cuts, Waller said.