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University of California Hires India-Based IT Outsourcer, Lays Off Tech Workers (computerworld.com) 618

Posted by BeauHD from the outsourced dept.
dcblogs writes from a report via Computerworld: The University of California is laying off a group of IT workers at its San Francisco campus as part of a plan to move work offshore. Laying off IT workers as part of a shift to offshore is somewhere between rare and unheard-of in the public sector. The layoffs will happen at the end of February, but before the final day arrives the IT employees expect to train foreign replacements from India-based IT services firm HCL. The firm is working under a university contract valued at $50 million over five years. This layoff affects 17% of UCSF's total IT staff, broken down this way: 49 IT permanent employees will lose their jobs, along with 12 contract employees and 18 vendor contractors. This number also includes 18 vacant IT positions that won't be filled, according to the university. Governments and publicly supported institutions, such as UC, have contracted with offshore outsourcers, but usually it's for new IT work or to supplement an existing project. The HCL contract with UCSF can be used by other UC campuses, which means the layoffs may expand across its 10 campuses. HCL is a top user of H-1B visa workers.
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University of California Hires India-Based IT Outsourcer, Lays Off Tech Workers More

University of California Hires India-Based IT Outsourcer, Lays Off Tech Workers

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  • Completely wrong.... (Score:5, Insightful)

    by beheaderaswp ( 549877 ) * on Wednesday September 07, 2016 @10:30PM (#52845409)

    This university should lose it's state and federal funding for doing something like this.

    Horrible insult to the USA, our students, and our educators.

    Terrible.

    • Re:Completely wrong.... (Score:5, Insightful)

      by sg_oneill ( 159032 ) on Wednesday September 07, 2016 @10:45PM (#52845481)

      Nationalism is never a particularly rational argument.

      However there is a much more reasonable argument. Part of the reason we pay taxes is because they are good for the economy, as they keep money flowing in the economy and increases employment in the public sector thus increasing consumption by the working class (which in turn feeds businesses). But if that work goes offshore, then that tax is going offshore and stops being useful to the taxpayer from an economic perspective.

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        I'd say there are many rational arguments for nationalism, but you saved me the effort by providing one yourself.

      • Re:Completely wrong.... (Score:4, Insightful)

        by Rockoon ( 1252108 ) on Thursday September 08, 2016 @04:19AM (#52846575)

        Part of the reason we pay taxes is because they are good for the economy, as they keep money flowing in the economy and increases employment in the public sector thus increasing consumption by the working class

        Yes, thats why I break a random window in the city every day. It keeps the money flowing and therefore increases employment and consumption.

        • Re: (Score:3)

          by judoguy ( 534886 )

          Part of the reason we pay taxes is because they are good for the economy, as they keep money flowing in the economy and increases employment in the public sector thus increasing consumption by the working class

          Yes, thats why I break a random window in the city every day. It keeps the money flowing and therefore increases employment and consumption.

          Ah, the Zorg strategy! [youtube.com]

          That's why Detroit is the ultimate national model for the Democrat party.

      • Re:Completely wrong.... (Score:4, Insightful)

        by Anonymous Coward on Thursday September 08, 2016 @07:43AM (#52847281)

        China, India, the EU, Japan and everyone else in the world protects their own workers and industries from foreign competition, while our laws and corporations do everything possible to screw our workers out of salary or a job using cheap offshore labor. This isn't about nationalism, but economic survival, and our declining median wages show we are not doing a good job of that.

      • Re:Completely wrong.... (Score:5, Insightful)

        by meta-monkey ( 321000 ) on Thursday September 08, 2016 @08:21AM (#52847491) Journal

        Nationalism is never a particularly rational argument.

        Nationalism is a very rational argument. My ancestors fought and died to establish a government of, by, and for the people. The purpose of the government is to serve the citizens of the country. The purpose of the economy is to serve the citizens, not the other way around. When the government is modifying the rules such that the economy serves the interests of the government and foreigners over the interests of citizens, it's not doing its job.

        What's irrational about expecting the government to serve the interests of the citizens who established, fund, and defend the nation?

        • Re:Completely wrong.... (Score:5, Insightful)

          by Pete Smoot ( 4289807 ) on Thursday September 08, 2016 @02:20PM (#52849795)

          Nationalism is a very rational argument.

          I respectfully disagree. The older I get, the fewer reasons I see to make a distinction between "us" and "them" other than selfishness.

          My ancestors fought and died to establish a government of, by, and for the people.

          Your ancestors and mine fought and died to protect our inalienable rights, that among these are life, liberty, and the pursuit of happiness, and that to protect these rights, we institute governments. Government is a means, not an end. But I split hairs...

          The purpose of the government is to serve the citizens of the country. The purpose of the economy is to serve the citizens, not the other way around.

          Yes, and in this case, the state government is serving the people by running a public university dedicated to teaching medical skills. Running an IT jobs program and spending more than necessary on IT staff does not serve the students or taxpayers of California. You may want more IT training and jobs in the US but that's not UCSF's mission or expertise. They quite reasonably decided to let someone else handle that and focus on their core job.

      • "Part of the reason we pay taxes is because they are good for the economy, as they keep money flowing in the economy and increases employment in the public sector thus increasing consumption by the working class"

        The ONLY legitimate reason to pay taxes is to fund government services necessary to serve the people. In every way paying taxes to stimulate the economy is a failed experiment, and has led us to this state of unsustainable debt and crippled government.

        You have come pretty close to claiming the broke

    • Horrible insult to the USA, our students, and our educators. Terrible.

      Yes, but this is in character with CA politicians. Recently when the Bay Bridge was constructed they used Chinese steel.

      Do you think the jobs of white collar IT workers are any more valuable than blue collar steel workers to CA politicians? That being a UC employee makes any difference to them? And don't kid yourself about the administrators of the UC system being politicians. Funds must be cut to fund their political payback projects and their vanity projects.

      FWIW, I have seen behind the scenes of UC

    • Re:Completely wrong.... (Score:4, Interesting)

      by scamper_22 ( 1073470 ) on Thursday September 08, 2016 @08:59AM (#52847693)

      Sometimes irony is too much.

      I imagine the university will also have the cognitive dissonance to talk about STEM and the information economy and the future of highly skilled work. We need to educate our kids in technology so they can have jobs in the future!

      By that they mean the kids can take courses at the university to bring business to the university.

      All the while doing this to actual tech workers.

  • Well, what do you expect? (Score:5, Informative)

    by Anonymous Coward on Wednesday September 07, 2016 @10:33PM (#52845425)

    You've let the worst human beings rule this world since... a long time now. You expect *good* news to just appear without doing anything about it? This nightmare will continue until a good person (if such a thing exists) decides to put a stop to it.

  • Training is immoral (Score:5, Interesting)

    by Dog-Cow ( 21281 ) on Wednesday September 07, 2016 @11:05PM (#52845629)

    Expecting an employee who is being fired to train his replacement is immoral. This is even more so when the employee is being fired without cause.

    The employees have every right, both legal and moral, to stonewall the education of their replacements. It would be immoral to sabotage systems or update documentation to be incorrect, but passive resistance is fair game, and far better than the University deserves.

    • Re:Training is immoral (Score:5, Insightful)

      by unixisc ( 2429386 ) on Wednesday September 07, 2016 @11:22PM (#52845721)
      Immoral maybe when having a citizen train another citizen. Probably illegal when having citizen train H1B worker. After all, when are H1B workers allowed? When an organization can demonstrate that they can't find Americans to do the same job (says nothing about the cost of doing it). But here, you have Americans who can do the job having to train foreign workers who can't as yet do the job. If they were training an offshore team in Bangalore or Gurgaon to do it, it would still be legal, if sadistic, but if they have to train H1B's to do it, then no!

      • Re:Training is immoral (Score:5, Interesting)

        by R3d M3rcury ( 871886 ) on Wednesday September 07, 2016 @11:43PM (#52845859) Journal

        Exactly!

        I have no problem with off-shoring. Sure, I don't like it, but the same technology that lets me work from home means that my job can be done from pretty much anywhere on the planet. And if that area has a lower cost of living so that someone can charge less? Again, I don't like it, but there's not much I can do. Competition is a good thing.

        If the work is being off-shored, though, then it shouldn't be done here. There should be no reason for anyone to have to come here for training. If they want in-person training, they'd better be sending me over there. Otherwise, we can do video-conferences and document our work and they can take it over.

      • Re:Training is immoral (Score:4, Insightful)

        by Calydor ( 739835 ) on Thursday September 08, 2016 @01:57AM (#52846249)

        The businesses probably argue that the H-1B workers have the TECHNICAL skills they need, and the training is more of a list of "This is what we've already done, this is why we did it" etc. since you can never hire a new worker, domestic or foreign, that instantly knows everything that's already been done on a project.

        • Problem is they still need to demonstrate why the current worker does not have those skills and cannot meet their needs. If you have someone already in a position and you aren't getting rid of them for cause, then presumably they meet the needs of that position. Thus if you bring in someone to replace them saying "This new person has technical skills we need" isn't really a valid argument.

    • Expecting an employee who is being fired to train his replacement is immoral. This is even more so when the employee is being fired without cause.

      The employees have every right, both legal and moral, to stonewall the education of their replacements. It would be immoral to sabotage systems or update documentation to be incorrect, but passive resistance is fair game, and far better than the University deserves.

      Most likely they're holding a severance package over the heads of current employees to be paid out upon completion of training their replacements.

      Sure, it's yet another sign of their immoral behavior, but they've already opened that can of worms, so par for the course.

      Stonewalling would require 100% participation. Doubtful you're going to get it when there are those who likely need the severance package.

    • The employees have every right, both legal and moral, to stonewall the education of their replacements.

      Sure they do. They have the right to quit. They don't have the right to continue getting paid while refusing to do the work being asked of them.

  • University of California had a good reason (Score:5, Funny)

    by Anonymous Coward on Wednesday September 07, 2016 @11:13PM (#52845685)

    University of California Cites 'Courage' As Reason To Lay Off Tech Workers

  • Right, university labor is expensive. (Score:4, Insightful)

    by somenickname ( 1270442 ) on Wednesday September 07, 2016 @11:15PM (#52845697)

    Are you telling me you can't find a handful of smart kids in your Computer Science department that would rather do remedial computer work than work at the mall? You've literally got an entire department of unemployed cheap labor and you are looking to India? That doesn't speak too highly about your graduates...

    • Re: (Score:2)

      by skids ( 119237 )

      Actually, this only works out if you have a lot of semi-technical people that enjoy re-training staff and keeping them busy. Heavy techs are too zoned in on their current projects to deal with this. For a college with this many IT staff, they really should have plenty of those, though, or they hired wrong.

      • Heavy techs are too zoned in on their current projects to deal with this.

        OK, so, American IT workers have a weight problem. So what?

    • CS = lot's of theory and little hands on at state schools. Also mit and harvard are more on the theory side and had some outsourcing WTF in the past.

      • CS = lot's of theory and little hands on at state schools

        Apparently CS also means skipping that class where they talked about using apostrophes (unless it's used to remark out a line in a script).

      • Re: (Score:3)

        by geek ( 5680 )

        CS = lot's of theory and little hands on at state schools. Also mit and harvard are more on the theory side and had some outsourcing WTF in the past.

        There is the problem. IT != CS. Getting a CS degree to do IT work is like getting your MD and becoming a nurse. Requiring CS degrees for simple IT work has fucking destroyed the industry.

    • Re:Right, university labor is expensive. (Score:4, Informative)

      by lgw ( 121541 ) on Wednesday September 07, 2016 @11:59PM (#52845917) Journal

      It's a medical school - they don't have a Computer Science department.

  • So one of the most Liberal institutions in one of the most Liberal cities in the country (being outdone only by its neighbors Berzerkley and Santa Cruz) decides to do exactly what Liberals accuse Big Business of? So many things - they can't produce students who'll do the same work at the same rates while being in the same time zone & place?

  • It's not likely to save them money either (Score:5, Insightful)

    by Sycraft-fu ( 314770 ) on Wednesday September 07, 2016 @11:28PM (#52845761)

    At least not unless there is a reduction in services. I don't know why people think outsourcing always saves money. It often doesn't. Basically outsourcing is a good idea if you are too small to be able to do something yourself efficiently. You either don't do enough of it, or do it often enough to make it worth having an internal team.

    For example construction is something basically everyone outsources. You just don't build new buildings often enough to make it a worthwhile proposition to have a dedicated staff for it, they'd be sitting around most of the time.

    However when you get large, often you can do shit in house for cheaper, or at least the same price and have more control. It isn't like those contract workers are free, and it isn't like the company who contracts them takes no cut.

    With a large university, practically everything should be in house. They are so large they usually have their own police forces, they are literally small cities. So you have enough needs that hiring your own staff usually makes sense. In general when I've seen a university outsource something they used to do it ends up costing them more, and the service is generally worse, sometimes a bit, sometimes a lot.

    Thus my bet is in the end this contract costs them more than they were paying.

    Worst example I've seen is a friend who consults for a public school system (primary, not university). They outsource most everything, as is evident from him contracting to them to do development. So a project he was doing needed a dedicated Linux virtual server. They balked at that, and he pushed back, confused. It was a low spec server, could be a VM, it just needed to be dedicated for security. The reason they balked? The outsourcing firm that ran their servers charged them well over $1000/year per VM. AT a rate like that, you don't need many VMs before it would be cheaper to buy a server and hire a guy who does nothing but mind after it.

    • nested VM's just request an 32 core 128 GB VM and then nest all own VM that you need under that.

    • Re:It's not likely to save them money either (Score:5, Insightful)

      by swb ( 14022 ) on Thursday September 08, 2016 @07:14AM (#52847147)

      AFAICT, the outsourcing savings are usually spreadsheet savings up front measured with optimistic labor costs of lower paid workers.

      Lost in these models are the inevitable cost increases that happen over time. Increased consulting management fees required from the inevitable management maze that gets created, adding in additional outsourcing bodies, often higher rate bodies with more skills when the cheap bodies aren't good enough, longer implementation cycles caused by the transient nature of outsourced workers who lack institutional knowledge and organizational buy-in.

      Then you get the service reductions, either because the outsourced staff aren't as good, deliberate service reductions as organization management attempts to contain spiraling costs, or service underdelivery by outsourcers working under fixed price contracts who face pressure from the outsourcing company who want to retain their own profit margins.

      I would argue that the basic economics of outsourcing don't make sense. The macro economy of an organization has a kind of invisible hand effect that sets the cost of IT services at a given service level. The idea that it's possible to deliver the same services at a lower cost while extracting a profit for the outsourcing provider without a loss in service delivery is like believing in free energy.

      Organizations that decide to fix their IT environments with outsourcing are basically admitting a failure of management, either the inability to manage their IT department or their entire organization. Sure, some IT departments are broken, but who's fault is it they got that way? Almost never the line level IT worker or even first tier of management.

  • We the people, for the people by the people

    (suckers)

  • San Francisco minimum wage heading to $15 (Score:4, Informative)

    by steveha ( 103154 ) on Wednesday September 07, 2016 @11:42PM (#52845847) Homepage

    This was likely a factor in the decision: the minimum wage is $13/hour and will be $15/hour by 2018.

    http://www.nbcbayarea.com/news/local/Minimum-Wage-Jumps-to-13-Per-Hour-in-San-Francisco-385257511.html [nbcbayarea.com]

    When something is more expensive, less of it gets bought. When it costs more to hire people, jobs start to go away.

  • is there a severance package? (Score:3)

    by future assassin ( 639396 ) on Wednesday September 07, 2016 @11:54PM (#52845893)

    Other wise I'd tell them to fuck off if I was told to train the person who is going to take my job by me being laid off.

  • The higher ed bubble is ready to pop.

    ITT was good in the 90's / 2000's but in 2016 it went under.

    Le Cordon Bleu schools owned by Career Education Corporation 2015

  • Being used to undercut my field of employment.

  • There goes the last "safe" employer (Score:5, Interesting)

    by ErichTheRed ( 39327 ) on Thursday September 08, 2016 @12:54AM (#52846093)

    UCSF is a medical campus, and they operate a hospital, so this is probably where the cuts are being made. Healthcare IT is badly funded and there's never enough money to do anything interesting...they're focused solely on keeping doctors happy so IT's needs never come before that. But, having a public university system signing outsourcing contracts with vendors, foreign or domestic, is a new twist I didn't see coming.

    It didn't say in the article what they offshored, but in my experience HCL is a mainframe programming shop, so of course this means that anyone being replaced is probably "old" and will have a very rough time finding employment even close to previous levels again. That sucks double for them, because they're going to be marched through the "train your replacement" humiliation to get severance/early retirement.

    I'm all for stuff like cloud computing, colocation, etc. where it makes sense, but I really don't understand why companies continue to believe they're going to get some great deal doing an outsourcing engagement. Do they not realize these companies have to get paid enough to profit from the deal? Where do they think that money comes from? I hate the trend of running companies on a huge tower of outsourced services. Every company of reasonable size should do almost everything in house -- it's cheaper in the long run and the employees doing the work are more engaged. There is absolutely no task that is better done by an outsourcer than your own employees.

    • This is what is going offshore: > HCL will provide data center monitoring and operations, server, storage, database, middleware and Citrix, as well as network operations, routers, switches, firewalls, load balancers, WLAN controllers. Other services will include unified communications -- telephony, email, chat, SharePoint, audio and video conferencing -- and application maintenance for PeopleSoft, C#, .Net and Java apps. It will also provide application development augmentation services, according to the

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