Job-losses in the technology sector in the US, which has invited flak for being a source of perceived job-losses in the country, is not even 1% of the total unemployment number in the country, according to the bureau of labour statistics, US department of labour.
The US unemployment rate in the month of September stood at 9.8%, the highest since 1983. However, the number of jobs axed as a result of outsourcing is a miniscule 0.2% of the total job cuts in the country according to a related report.
Though subdued for the past few months now, outsourcing of software services and back-office outsourcing has been embroiled in protectionist sentiments with many years now. The overtures gained ground when US President Barrack Obama asked the country to create more jobs in Buffalo than in Bangalore in a speech a few months back.
There have been several attempts to impose curbs on the limit of H-1B and L1 visas, which are used by technology companies to send Indians overseas. However, back of the envelope calculations suggest that the total jobs lost in the technology space over the last one year is around 1,95,400, which works out to around just 0.66% of the total jobs cut during the last one year.
According to the data, professional and technical services witnessed 1,86,200 jobs lost in the past one-year (from September 2008-September 2009), while management and technical consulting saw 9,200 jobs being axed. However, computer systems design and related fields added 1,200 workers.
Experts said that the above figures are also estimates and the real numbers of job losses in the technology space will be much lower as professional and technical services will also include a significant amount of non-tech workers. Som Mittal, president of the IT industry body Nasscom said that though the ?outsourcing of jobs? rhetoric is slowing declining, ?we will have to be watchful and can?t get complacent about it?.
A team of Nasscom, which included Mittal and its vice-president Ameet Nivsarkar, has recently returned from the US after meetings with key senators and stakeholders. In fact, as reported by FE earlier, the issue of H-1B and L-1 visa is likely to come up in the Comprehensive Immigration Reform Bill being initiated by Senator Charles Schumer, which will address several other key issues like residency and citizenship.
Mittal said that the Bill introduced earlier by Senator Dick Durbin and Chuck Grassley, which aimed to put serious curbs on the use of these visas by technology companies is ?unlikely to come up in its present form?.
?It is generally thought that companies take employees to US to cut costs. However, if that was the case, this year the quota should have been filled long before,? said Nivsarkar. This year the cap of issuance of 65,000 H-1B visas is still to be filled with only 46,700 issued this year.
According to another report by a leading outplacement firm in the US? Challenger, Gray and Christmas?the tech sector is among the five sectors, which have witnessed the least number of job losses with 494 job cuts during September with the maximum number of job losses in the automotive sector at 22,114 jobs followed by government/non-profit and retail.
So far this year, 53,714 jobs have been axed in the tech sector. Moreover, only 3,100 jobs were cut due to outsourcing as compared to a total number of 1,136,908, where the biggest reasons for job cuts were economic conditions and cost cutting.
Ganesh Natarajan, former chairman of Nasscom said through its continuous efforts, the industry has been able to impress upon the fact that unemployment in the tech sector is far lesser number than the overall numbers.
