The Fuss Only Fuels The Outsourcing

By Jyoti Thottam

The number has become something of a mantra for the jobless recovery--3.3 million U.S. jobs will move overseas by 2015. Forrester Research came up with the estimate in late 2002, kicking off the current furor over outsourcing, the movement of jobs out of the U.S. Now the consultancy has released its first revision of that landmark study, and the news is not comforting. Job losses, it concludes, will hit a lot sooner than expected. By the end of next year, Forrester believes, 830,000 jobs will have gone abroad, mainly to India. That's 242,000 more than it had earlier projected.

The growing backlash against outsourcing isn't discouraging the practice. In fact, worries about companies exporting jobs, says the report's author, John McCarthy, have actually proved "a little self-fulfilling." Media attention, he explains, may have put some companies on the defensive about their plans to hire programmers in Bangalore rather than Boston, but their executives have learned that competitors have offshore strategies in the works and decided they will have to follow suit to remain competitive. Companies are still under pressure to cut costs in areas like information technology. So the tech sector will be hit hardest--181,000 jobs lost by 2005, or 66% more than earlier projected. Other professions are not immune. About 20,000 legal jobs are expected to move abroad by 2005, a 41% jump over the previous estimate. McCarthy says he does not believe that state and federal proposals to restrict outsourcing will succeed. But companies may eventually be required to report offshoring to the Department of Labor, as they now do factory layoffs.

--By Jyoti Thottam