Note: The Skinny blog is written by Rick Smith, editor and co-founder of Local Tech Wire and business editor of

RESEARCH TRIANGLE PARK, N.C. – If new figures reported today by The Times of India are correct, IBM (NYSE: IBM) most likely now employs more people across India than in the United States.

“Wake up and smell the … Darjeeling,” the same Times of India quoted one blogger as writing about Big Blue’s U.S. workforce in 2007. Darjeeling is an exquisite black tea – from India. Now, more native-born Indians work for IBM than ever, waking to that smell.

Unfortunately, Big Blue won’t say anything about the numbers.

"IBM does not disclose head count on a geographic basis,” Doug Shelton, IBM’s corporate director of Communications, told Local Tech Wire and when asked about the report.

With U.S. unemployment in near double digits (18 percent if people no longer seeking work are counted), outsourcing of jobs oversees is an even more inflammatory issue. India’s growth could ratchet upward even higher debate about issues such as U.S. visas for foreign high-tech workers.

The newspaper did say IBM has some 153,000 workers in the U.S., but the last official numbers the company posted in annual reports before its change of policy listed far fewer. As for how many there are in the U.S. right now, Alliance@IBM, the union seeking to represent IBM workers, estimates some 102,000.

That number could be higher, given IBM’s recent series of acquisitions and expansions into areas such as business analytics.

The Indian newspaper estimates that IBM has some 120,000 to 130,000 workers in that country. (In January, The Economic Times of India reported that IBM planned to add 5,000 employees in India as it looks to open more “business process outsourcing” operations, or BPO centers.)

For the record, IBM no longer reports where its some 400,000 employees are located. Big Blue also will no longer even say how many people work around RTP, which was long considered IBM’s largest campus with 10,000 or more workers.

Business continues to be strong for IBM, despite the global recession. And Big Blue is aggressively seeking growth across India.

Labor costs are also a factor

Costs in India is also sharply lower than in the U.S., according to IBM’s own figures. In a 2006 report, IBM estimated that hourly labor costs in the U.S. would be $27 an hour in 2010 vs. $6 an hour in India in 2010.

According to PayScale, a senior software engineer in India makes around $11,300.

The same website says an IBM senior software engineer makes just over $100,000.

Is Bangalore IBM’s largest hub now?



Only IBM really knows. And they won’t say.

Union says India growth “expected”

The Indian report didn’t surprise Alliance@IBM.

“The news of IBM India employee population continuing to climb is expected. IBM continues to offshore work to India and many other countries, which increases the unemployment and downward slide of information technology workers here in the U.S.,” the Alliance’s Lee Conrad told LTW and

The last official figure from IBM for its U.S. workforce was 105,000 as acknowledged by a corporate executive last year.

It’s no secret that IBM has been aggressively cutting its U.S. workforce even as it acquires other firms and launches new initiatives such as in cloud computing.

Here’s the breakdown on the decline as tabulated by Alliance@IBM, the union seeking to represent U.S. workers:

• 2009: 105,000
• 2008: 115,000
• 2007: 121,000
• 2006: 127,000
• 2005: 133,789

Alliance@IBM notes that IBM did make hires in the U.S. in 2009 (3,514), but that’s one fifth the hiring in India (18,873).

The Times seemed to take great pride

“The fact that IBM has over one lakh [100,000] people on its rolls in this country is one of India Inc’s best-kept secrets. No one in US-headquartered IBM will admit that it employs such a large number of people in India – for fear of a backlash at home. There’s been rising anger in the US over the transfer of `American jobs’ to lower cost havens, particularly India. Faced with an economic slowdown and a politically-damaging high employment rate, Barack Obama himself has begun to sound jingoistic. He has issued barely-veiled threats against US companies that ship out work and promised candies to those who stay patriotic.”

According to the Times, IBM’s Business Process Outsourcing group has “about 50,000” workers and IBM Global Services combined with IBM Labs have “another 70,000 to 80,000.”

“It’s well known that IBM has been hiring aggressively in India,” the Times added. “The 2007 figure of 73,000 was a near 40% increase over the 2006 figure of 53,000. Since then, big IT companies have been hiring upwards of 20,000 people a year.”

And IBM apparently will be adding even more Indian workers.

“The hiring aggression is continuing,” the newspaper said. “[Times of India] reported last month that IBM will take up close to 1.25 million [square feet] of office space this financial year, for which it has signed leasing deals with multiple developers. Real estate consultants said the company’s plan is to absorb 3 million sq ft across IT hubs like Bangalore, Pune and Hyderabad over the next three years.”

Palmisano’s vision

IBM’s commitment to India is not new. In 2006, Chairman and CEO Sam Palmisano during a visit to India laid out his Indian vision:
"India and other emerging economies are an increasingly important part of IBM’s global success," Palmisano said. "If you are not here in India, making the right investments and finding and developing the best employees and business partners, then you won’t be able to combine the skills and expertise here with skills and expertise from around the world, in ways that can help our clients be successful.

"I’m here today to say that IBM is not going to miss this opportunity. In the next three years, we will triple our investment in India — from $2 billion over the last three years to nearly $6 billion in the next three years. That investment will ensure that we make the most of the opportunities to grow this marketplace, while it also enables IBM to fulfill its vision to become a globally integrated company."

Put some more Darjeeling on to boil.

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