Cash-strapped U.S. companies, devoid of management imagation, strive to cut costs by moving IT staff to India. They’ll do the same things with computers that they were doing in the 1980s and 1990s but do them cheaper.
Microsoft was the exception. Yahoo Finance shows that they’ve got a 30.6% profit margin and $46.2 billion in cash. These are what economists call “supranormal monopoly returns”. Yet what do we find in today’s Reuters: “Microsoft Shifting Development, Support to India”. Microsoft is firing American workers and hiring in India.
[The other half of the Wintel duopoly is doing the same thing. A friend of ours had his little company acquired by Intel. They’ve had a hiring freeze in the U.S. for more than a year but would be happy to give him 20 newly hired programmers for his product… in China. He’s now living in Shanghai and loving it, managing a medium-sized cubicle farm of eager under-25ers all recently graduated with Computer Science degrees.]
In a slightly related story, the New York Times today reports that the U.S. unemployment rate is up to 6.4 percent, its highest in 9 years. The stock market is basically okay, though. Investors realize that American corporations can make plenty of money without necessarily hiring Americans…