Vol. 49, No. 4
EDS, one of the pioneers of offshoring, doesn’t apologize for the practice that most companies won’t talk about.
“For EDS, it’s a way for us to stay competitive in our marketplace,” says Travis Jacobsen, an EDS spokesman in Plano, Texas. “EDS is the No. 2 IT service provider around the world after IBM. In order to maintain our competitiveness, we have to take advantage of lower-cost locations throughout the world. It’s this scenario: Either you place 100 jobs in Ireland, or you lose 1,000 jobs in the United States.”
EDS has 135,000 employees globally. As of January, it had about 8,800 applications development and business process services personnel working in 25 countries.
EDS began offshoring in 1990, when it opened its applications Solutions Centre in Ireland for General Motors, one of its largest clients. By the end of 2004, EDS expects to have 14,500 employees working offshore, and, by the end of 2005, anticipates it will have 20,000 employees—about 15 percent of its workforce—offshore.
Jacobsen says EDS’ offshore work doesn’t translate into domestic layoffs, one of the biggest objections opponents have to the practice. It “isn’t at all tied to our workforce reduction activities in the United States. We are eliminating redundant positions in the United States, but there’s not a direct one-to-one correlation. If we don’t do it, we won’t continue to grow as a company and then those 135,000 employees’ jobs are at risk,” he says.
EDS uses offshoring for commercial business, but not for government work “where there is a concern for job location,” Jacobsen says. The company has offshore employees working in customer relationship management, desktop services, financial process management, business process outsourcing, applications and web development, applications maintenance or delivery, and enterprise shared services, Jacobsen says.
EDS considers many issues when offshoring, including making sure it is aware what types of jobs can be supported offshore, Jacobsen says.
HR also needs to consider the communications component of a foreign operation, he says, so employees know they are being treated respectfully and fairly. Re-skilling the workforce also is significant, as EDS is either reducing or increasing staff at various locations, Jacobsen says. The company must determine what skills are available and whether it can advance skills of existing employees so they can take on another position.