San Francisco University Lays Off IT Workers; Jobs Head to India

cageymaru

cageymaru

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The University of California, San Francisco laid off 49 IT workers and vacated an additional 48 IT positions in an attempt to save 30 million dollars over 5 years. The University has decided to outsource these IT jobs to India to save on costs. USCF entered into a 5 year $50 million deal with HCL Technologies Ltd to handle the work.

The UCSF is a school focused on health care and research. It would seem that they would be the last entity seeking to outsource the IT department to a foreign country. I wonder how did they analyze their budget and expenses to determine that this was the best course of action. There had to have been a better solution. Maybe the ones on top making these decisions needed a pay adjustment instead of this outsourcing nonsense? I bet this costs them more in the long run.

"It's a downgrading of services and a slap in the face for the customers," said Ho, who has worked in IT in the Bay Area for 25 years. He said he plans to look for a job but worries that outsourcing of IT services is a growing trend. Last year UCSF entered into a $50 million contract over five years with India-based HCL Technologies Ltd to do the work.


Please don't make this political! Looking for solutions and stories of IT outsourcing. Feel free to discuss the topic, but absolutely no politics please!

Thanks!

 
I think the solution is actually political in nature.

Any college / university that receives federal funding should absolutely hire Americans first (all that's legally able to work) and then only consider work visas if no Americans are qualified/insufficient #.

And politics play a big part in this too.
 
I expect a tweet about this in 4... 3... 2... :D
 
wow insane... their 50 staff members cost 80 million (I assume 50mil + 30 mil) over a 5 year period?

80,000,000/5 = 16,000,000
16,000,000 / 50 = $320,000

I call BS on all this. They most likely were including infrastructure costs. Either way thats insane for a university.
 
Jon855 said:
I think the solution is actually political in nature.

Any college / university that receives federal funding should absolutely hire Americans first (all that's legally able to work) and then only consider work visas if no Americans are qualified/insufficient #.

And politics play a big part in this too.
Click to expand...

So...to be clear here: You're in favor of paying higher taxes to pay for these people? Because that's what it comes down to: Jobs versus Taxes.

Seriously, people want it both ways all the time, then complain when they don't.
 
Jon855 said:
I think the solution is actually political in nature.

Any college / university that receives federal funding should absolutely hire Americans first (all that's legally able to work) and then only consider work visas if no Americans are qualified/insufficient #.

And politics play a big part in this too.
Click to expand...

I agree with you 100%. These big universities are doing research using government grants. This shouldn't be happening. What if they discover something and it falls into the wrong hands due to lax network security?

You made a very good point!
 
The University of California, San Francisco laid off 49 IT workers and vacated an additional 48 IT positions in an attempt to save 30 million dollars over 5 years. The University has decided to outsource these IT jobs to India to save on costs. USCF entered into a 5 year $50 million deal with HCL Technologies Ltd to handle the work.
Click to expand...

Wait what? UofC needs to math better

97 IT positions eliminated save 30M over 5 years. That's about $62000 per position per year.

They then outsource these positions for 5 years at a cost of 50M. (n)
 
There's actually a simple solution to outsourcing, that doesn't run afoul of FTA's:

Any business incorporated under US Law must pay all of it's workers the equivalent of the US Federal Minimum Wage, regardless of what country those workers are employed in.

Simple. This eliminates outsourcing strictly for cost-savings reasons, and has the side benefit of increased wages in countries where outsourcing continues to take place. Win-win. Except for stock prices and CEOs, but hey, someone has to lose.
 
The Gonz said:
Wait what? UofC needs to math better

97 IT positions eliminated save 30M over 5 years. That's about $62000 per position per year.

They then outsource these positions for 5 years at a cost of 50M. (n)
Click to expand...

I figured it had to have cost them $80 million. I just went with the information in the article and was wondering the same as you for a minute. ;)
 
The solution is to realize that blindly outsourcing is not going to save money.

My last employer laid off a majority of the development staff in order to outsource, keeping a skeleton crew around. This led to more people leaving within half a year (myself included as QA) because of lack of confidence in the organization's decision making and the lack of quality that the outsourced team was producing. Apparently after flushing a bunch of money down the drain and receiving complete crap code back, they ended up rebuilding the team and rewriting 2 year's worth of work. Clearly, counting lost time, retraining, etc, outsourcing cost way more than keeping work in-house.

On the other hand, my current company also outsources some work, and they do good work. They're also not going to replace us domestically, they handle overflow. I'm not sure what they cost, but I imagine that it's less than domestic labor but not too much less.
 
It's 100% political, sorry. If you have been following this story, they aren't allowed to hire H1-Bs due to the law, but can outsource? Then there's all the HIPAA, FERPA, etc issues. Someone is either trying to make their bones and then get a huge paycheck elsewhere, damn the consequences, or their IT was FUBAR and this is the most efficient way of cleaning house. Fire everyone, outsource in an impossible manner, and then bring it back in house when that fails. Without a reorg move like this, firing a lot of people from a university can be difficult.

As for the making their bones thing, It was done in North Carolina. Dude cut costs 50%, has moved on to the ivy league cause he "knows how to save IT money". The reality is they were spending too much for too little, it wasn't some miracle. We get reminded of it constantly, and have to inform them that to reach that guys spend per head on IT post cut, they'd have to double our budget. His 50% cut would be our massive budget increase. People don't get it, they want the myth of the super manager who can come in and fix stuff, preferably with zero support from the peer management chain. Because that would mean they don't have to fix their systemic problems.

Unless it is the head fake to dump dead wood, then I'm guessing this will bite them in the ass at some point for violating one of the vast array of privacy and data security regulations universities have to deal with. If they are hugely disfunctional and have central services replicated all over the place, this may also be their route to giving up on central services outside of minimal key infrastructure. In that case they weren't really replaced by offshore labor, but by departmental hires.

All I know is there has been jack shit out the CWA peeps about it and they blather on about every god damned telcom thing they dislike and anything they think might be usable ot push a broadening of the union foothold here, so... there might be more to this story than is in the news.
 
gamerk2 said:
So...to be clear here: You're in favor of paying higher taxes to pay for these people? Because that's what it comes down to: Jobs versus Taxes.

Seriously, people want it both ways all the time, then complain when they don't.
Click to expand...
I didn't say anything about taxes but I strongly believe that many of the issues are political in nature when it comes to education and outsourcing jobs.

It doesn't help that the COL is absurdly high and possibly quite unsustainable. Something will have to give.

The Gonz said:
Wait what? UofC needs to math better

97 IT positions eliminated save 30M over 5 years. That's about $62000 per position per year.

They then outsource these positions for 5 years at a cost of 50M. (n)
Click to expand...

How I read that was 97 positions cost 80mil over five years and thus paying the 50mil over five years will net a savings of 30mil. If I'm mistaken then well I'm wrong.
 
The Gonz said:
Wait what? UofC needs to math better

97 IT positions eliminated save 30M over 5 years. That's about $62000 per position per year.

They then outsource these positions for 5 years at a cost of 50M. (n)
Click to expand...

Don't forget infrastructure costs, benefits (especially medical/retirement), and even liability concerns. All those go away via outsourcing. In term's of salaries, the University looses money. In terms of cost, it's a massive savings.
 
So UCSF concentrates on medical education (and operates a hospital etc), so they don't really have students in relevant fields to pull for cheaper labor like most schools. I wouldn't be surprised if they could get a better deal by outsourcing IT, but I don't know that it makes sense to outsource the IT work overseas, a lot of IT work for a university is going to need to be on location, so I would want the staff that's onsite for that work to also be doing some of the work that could be done offsite; and coordination is easier if everyone is just onsite.
 
They'll learn soon enough that much of IT needs to be local to work properly. Sure, they can outsource the systems admins, until a server upgrade is needed, and then they can contract out for the project, but the people just won't care on the same level to do things right. In 10 years, their IT structure will be a total mess. As for outsourcing the helpdesk, they'll learn that won't work in about 6 months.
 
Jon855 said:
I didn't say anything about taxes but I strongly believe that many of the issues are political in nature when it comes to education and outsourcing jobs.

It doesn't help that the COL is absurdly high and possibly quite unsustainable. Something will have to give.
Click to expand...

The public pays taxes to pay for its University system. And it's those taxes that pay for those workers.

That's the issue here: Is $20 million/year or more in taxes worth keeping a hundred IT workers employed?

I'm just pointing out the hypocrisy: People complain when employees get replaced with cheaper labor, then in their next breath yell "TAX CUTS!".

Note this is independent of the fact outsourcing IT functions rarely works out.
 
I rank this right up there with cities (looking at you Europe) who thought moving to Linux away from Windows would save them buckets of $$$, only to find out years later that it in fact did not and they have to bend over to transition back to Windows.
 
gamerk2 said:
The public pays taxes to pay for its University system. And it's those taxes that pay for those workers.

That's the issue here: Is $20 million/year or more in taxes worth keeping a hundred IT workers employed?

I'm just pointing out the hypocrisy: People complain when employees get replaced with cheaper labor, then in their next breath yell "TAX CUTS!".

Note this is independent of the fact outsourcing IT functions rarely works out.
Click to expand...
I understand what you are saying and in that aspect you are correct.

There could definitely be some sort of reforms which could bring that down however, that would be difficult to even approach, especially the unions.
 
Doesn't it seem like they are late to the "let's move IT to India" party? I thought that trend had shifted in the last couple of years, am I mistaken?
 
It's been my experience that outsourcing leads to reduced quality of work. Often times companies care little about this and only look at the bottom dollar price. At one place I worked we had guys in China that weren't worth a shit. With our remote tools and bandwidth we didn't really need them. We brought most of those jobs back to the US and kept one or two guys out there to be our hands, eyes and feet in certai situations. The productivity increased substantially by doing this.
 
So some douchebag up top thought they could get cost-savings somewhere and said "$30 million cost savings over 5 years! Why isn't everyone doing this?" and didn't even bother to do research on the recent history of outsourcing and jobs having to come back to the US. My last employer, Boeing, did this bullshit and they outsourced a lot of the IT divisions to Computer Sciences Corporation (very similar to Accenture's structure) and quality of work went down so bad that Boeing backtracked on it. However year after year, they're still laying off people left and right. Fuck that company.
 
Maybe some students will decide to pick another university for their education. Any savings the university thought it would keep would drain out the bottom of their coffers.
 
Kaitian said:
So some douchebag up top thought they could get cost-savings somewhere and said "$30 million cost savings over 5 years! Why isn't everyone doing this?" and didn't even bother to do research on the recent history of outsourcing and jobs having to come back to the US. My last employer, Boeing, did this bullshit and they outsourced a lot of the IT divisions to Computer Sciences Corporation (very similar to Accenture's structure) and quality of work went down so bad that Boeing backtracked on it. However year after year, they're still laying off people left and right. Fuck that company.
Click to expand...

But that guy gets a raise, and as the stock price will go up due to savings the CEO will earn more money (stock options) and likely get a large bonus. And when things go to hell, he'll get a parachute and move on.

Welcome to business.
 
ir0nw0lf said:
I rank this right up there with cities (looking at you Europe) who thought moving to Linux away from Windows would save them buckets of $$$, only to find out years later that it in fact did not and they have to bend over to transition back to Windows.
Click to expand...

Linux seemed to be working fine for Munich until the new mayor decided to ask a company with ties to Microsoft whether they should move back to Windows and surprise surprise they said they should. Not to mention Microsoft decided to move an office to Munich. That's not shady shit at all.......
 
gamerk2 said:
There's actually a simple solution to outsourcing, that doesn't run afoul of FTA's:

Any business incorporated under US Law must pay all of it's workers the equivalent of the US Federal Minimum Wage, regardless of what country those workers are employed in.

Simple. This eliminates outsourcing strictly for cost-savings reasons, and has the side benefit of increased wages in countries where outsourcing continues to take place. Win-win. Except for stock prices and CEOs, but hey, someone has to lose.
Click to expand...

People don't seem to understand why outsourcing happens, it's not because guy X will do it cheaper than guy Y. It's because once it's contracted to another company at a flat rate guy X isn't part of the equation any longer. All of a sudden the people handing out contracts simply sit back and demand another company meet their obligations, working conditions and wages are irrelevant. Any sort of law or rule that forces foreign contractors to pay American living wages to their employees would be considered labour market interference and governments aren't generally keen to do that since it always makes somebody angry. The only time it's good to interfere in a labour market is if you take some lobby money and break a union or two.

The only way to create the situation you describe is for the first company to demand a certain wage be paid from the company they're contracting to that company's employees. There are companies like that, companies that are forced to do so by employee contracts, they're all 'shops' who have employees in large, organised groups for negotiations. There's a fancy word for large organisations of employees that negotiate with employers for terms, I dare not speak it fondly in delicate company.
 
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This is why I am so glad that I switched careers, being a railroader is much more rewarding than the thankless environment of IT. End users, loved me so I guess it wasn't thankless, but still.
 
oROEchimaru said:
wow insane... their 50 staff members cost 80 million (I assume 50mil + 30 mil) over a 5 year period?

80,000,000/5 = 16,000,000
16,000,000 / 50 = $320,000

I call BS on all this. They most likely were including infrastructure costs. Either way thats insane for a university.
Click to expand...
Probably includes other cut likes new hardware and stuff I assume.
 
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Derfman said:
This is why I am so glad that I switched careers, being a railroader is much more rewarding than the thankless environment of IT. End users, loved me so I guess it wasn't thankless, but still.
Click to expand...

It's a shit job. A fast paced career in technology is why I build log homes. I got replaced by 23 people once. After that the fuckers tried to hold my severance until I would sign a contract to be on call for five years to help the new Indian team. My middle fingers grew an inch that day.

You know your job is hurting every aspect of your life when you go home and your wife's response is "Oh thank god" when you tell her you've been outsourced.

She carried a bit of Texas up here with her though, her native tongue is Gofuckyourselfese.
 
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This is what gets you banned.
This must be fake news.

A leftist university in a leftist city, in a leftist state, laying off working people and outsourcing jobs?

Leftist care about the little guy so they would never do this. It must be some right wing business guy's fault.
 
Twisted Kidney said:
It's a shit job. A fast paced career in technology is why I build log homes. I got replaced by 23 people once. After that the fuckers tried to hold my severance until I would sign a contract to be on call for five years to help the new Indian team. My middle fingers grew an inch that day.

You know your job is hurting every aspect of your life when you go home and your wife's response is "Oh thank god" when you tell her you've been outsourced.

She carried a bit of Texas up here with her though, he native tongue is Gofuckyourselfese.
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I fully agree. In the IT field, you're better off developing some sort of niche field which you (almost) can't be replaced by someone else because someone else doesn't exist.
Generic help desk, networking, admin and coding are all fields that almost anyone can do. If you start working at a hospital, start learning the software they use and become an expert in modifying it. Sell yourself to another place for a higher wage after 5 years. You don't want to let yourself become irrelevant or complacent over time. I'm sure it's like that in every field but it's especially true in a field that's constantly changing and evolving.
 
I think it's a shell game as far as funding. State universities do not get federal funding, the state funds them, it's students who go to these universities that may get federal funding, as well as grants. But this is because the federal government wants an educated population or a particular type of research done, lets not pretend this is altruistic of the feds.

That said, the UCs have have a history of doing things because they want to do things a particular way, as if they're above everyone else. (need to end there else it might get "political")
 
Just because the people have been outsourced doesn't mean the public in CA gets a savings of that money, even if they simply fired all of them and didn't replace with outsourced workers.
 
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