Programming their demise
SAN JOSE, Calif. -- Scott Kirwin clung to his job at a large investment bank through several rounds of layoffs last year. Friends marveled at the computer programmer's ability to dodge pink slips during the worst technology downturn in a decade.
But it was tough for Kirwin, 36, to relish his final assignment: training a group of programmers from India who would replace him within a year.
"They called it 'knowledge acquisition,"' the Wilmington, Del., resident said. "We got paid our normal salaries to train people to do our jobs. The market was so bad we couldn't really do anything about it, so we taught our replacements."
Finally laid off in April, Kirwin sent out 225 resumes before landing a temporary position without benefits at a smaller bank -- and swallowing a 20 percent pay cut.
Kirwin is among what appears to be a growing number of American technology workers training their foreign replacements ó a humiliating assignment many say they assume unwittingly or reluctantly, simply to stay on the job longer or secure a meager severance package.
Their plight can be seen as an unintended consequence of the nation's non-immigrant visa program -- particularly the L-1 classification. The L-1 allows companies to transfer workers from overseas offices to the United States for up to seven years -- ostensibly to familiarize them with corporate culture or to import workers with "specialized knowledge."
It also lets companies continue paying workers their home country wage. Indian workers receive roughly one-sixth the hourly wage of the average American programmer, who makes about $60 per hour in wages and benefits.
Large technology companies say the L-1 helps them staff offices in less-developed companies with workers who understand the needs of a global corporation. And some labor experts say out-of-work programmers should stop complaining, and focus on their own re-training, just like the Rust Belt assembly line workers whose factory jobs migrated to Mexico and Asia in the 1980s.
But unemployed tech workers contend that so many good jobs are going to places like Bombay, Bangalore and Beijing that honing their technical skills is futile. According to the research firm Gartner Inc., one out of 10 technology jobs in the United States will move overseas by the end of next year.
"Once I figured out what was going on, I was disgusted," said Kevin Sherman, a 47-year-old programmer and technical author from Worthington, Ohio, who was working for Manifest Corp., an information systems consulting firm in Upper Arlington, Ohio.
Sherman held onto his $62,000 per year contract job while he taught several dozen Indian workers how to build and maintain computer databases in 1999 and 2000. He quit rather than take on his next assignment: fixing the newly trained foreigners' broken PCs. He's been unemployed for two years.
Nancy Matijasich, Manifest president and CEO, said she no longer employs L-1 workers like those Sherman trained, because the Y2K threat has passed and the company has less need for programmers.
"There was a shortage of skills in the '90s," Matijasich said. "But we haven't processed visas in a long time."
The State Department issued 28,098 L-1 visas from October to March, the first half of fiscal 2003. That's an increase of nearly 7 percent from the same period in 2002.
But the number of L-1 workers in the United States is likely much higher, said Charlie Oppenheim, the State Department's chief of immigrant visa control. Each L-1 lets a worker enter the United States multiple times over several years.
There is no limit on the number of L-1 workers companies may import each year. Legislation introduced last month by Rep. Rosa DeLauro, D-Conn., seeks an annual limit of 35,000 L-1 workers nationwide.
By contrast, tight controls govern the H-1B visa, which requires companies to pay workers the prevailing American wage. The H-1B cap is scheduled to be reduced from 195,000 workers to 65,000 per year on Oct. 1.
Tech bellwethers including IBM, Hewlett-Packard, Cisco Systems, Oracle and Microsoft use L-1 workers but won't disclose how many they import. Many bring in workers through consulting firms, usually Indian companies such as Tata Consultancy Services, Infosys Technologies and Wipro Technologies.
Intel spokeswoman Gail Dundas acknowledged that the world's largest chipmaker relies on Americans to train L-1 workers who staff the company's offices in Russia, India, China and other high-growth markets. But she says the Intel training program does not result in American layoffs.
"If someone does something really well, we want the person who's going to perform a similar function abroad to learn from the master. Then the person in the United States will continue to do their job just as before," Dundas said.
Intel provides L-1 workers a cost-of-living adjustment if they work at the Santa Clara headquarters or elsewhere in the United States. Intel pays for housing, cars, return trips to the workers' home countries and full medical benefits -- a package that ends up costing significantly more than hiring an American, she said.
Dallas-based Texas Instruments also imports L-1 electrical engineers. With U.S. colleges graduating fewer U.S.-born engineers and the population of foreign-born science graduates mushrooming, TI has to look overseas for talent, spokesman Dan Larson said.
"You have a declining pool from which to draw, and more of those people are foreign nationals," Larson said. "If you're a company looking to hire electrical engineers, you're obliged to hire the best and brightest from wherever."
Sunil Mehta, vice president of NASSCOM, a New Delhi-based trade association for Indian software companies, claims the L-1 program has created about 1.5 million jobs in the United States since it began in 1970.
Still, NASSCOM and a U.S. counterpart, the Information Technology Association of America, acknowledge that some companies exploit loopholes. ITAA published guidelines for members on July 29, suggesting that companies pay the prevailing U.S. wage and import only those foreigners who have skills lacking in America.
"Similar visas exist in 20 to 25 other countries, including India," Mehta said. "I don't think we should throw the baby out with the bath water because of a few loopholes."
Michael Emmons says he's already become an L-1 casualty. The 41-year-old software developer moved from California to Florida in 2001 after Siemens, his contract employer, merged with another company. He was supposed to help fuse disparate software into a single system, but he and a dozen co-workers ended up training Indian replacements to connect systems using IBM software.
Emmons, who quit the Siemens job after being told his position would be terminated, is now lobbying politicians to abolish the L-1. He's also considering a career in politics -- running on an "American Workers First" campaign.
"I'm not saying offshoring can be stopped, but it does not have to be like this," he said.