IBM Employees in India
IBM has revealed that it has approximately 73,000 employees in India. Based on the headcount at the end of 2006 of 355,766 employees and a projected rate of growth equivalent to 2006, IBM now has approximately 20% of its workforce in India. And why not? India offers a skilled workforce without the high cost of labor that usually accompanies such workers in the West. The projected annual revenue from the Indian market for 2007 at $1 billion is yet another reason for IBM to ramp up its workforce in the sub-continent. The BRIC countries (Brazil, Russia, India, and China) are expected to have high growth rates in the coming years and IBM Chairman, Sam Palmisano, wants to direct more of IBM’s investments into these emerging economies. Jesse J. Green Jr., IBM’s Vice President of Financial Management, is optimistic and stated, “we see continuing good stability in the BRIC countries in general and good opportunity for growth in those countries as well.” (See Associated Press article)
I think that it is commendable that IBM execs are aware of the labor savings and the potential for increased revenues from emerging markets. Many of us have direct investments in IBM or indirect investments through 401K’s and other investment funds. As a public company IBM is acting according to its mandate to increase investor value. However as a good corporate citizen there are other considerations as well, such as social, political, ethical, and religious. How much outsourcing of skilled labor is too much outsourcing? My only cautionary note is not to overdue and abuse the situation. Employee growth in these emerging markets should be, and I am sure that it is, managed growth to meet the needs of the growing market but not at the expense of these other considerations. We all remember the dot.com boom and then the bubble that burst. We are all aware of the real estate boom of recent years and the subsequent subprime mortgage bubble that has panicked much of Wall Street and Western Europe as well as investors from the Middle East and the Pacific Rim. India is a nuclear power and borders Pakistan another nuclear power and its antagonist. Does IBM really want to put all of its eggs in one basket?
