In an interesting piece of news coming in, Armonk, New York-based global technology and innovation giant, IBM now employs 130,000 people in India, a figure that is about one-third of its total work force, and more than in any other country, including its home country.

IBM as a name needs no introduction. But, let’s have a quick recap of all that the company has managed to achieve since starting up. In its early years, the company eclipsed the era of computing with inventions like the mainframe and the floppy disk. Having offices all over New York and Silicon Valley, the company acquired the reputation of being known as a hub of American innovation long before words like Google and Microsoft became a part of our Tech dictionary.

However, ten years ago, the bosses at IBM decided to make a strategic change in the operations of the company and shifted its center of gravity all the way to the Indian subcontinent, which can be considered as a prime example of the globalisation trends that has been on the agenda of Trump administration for a couple of years now.

People working in IBM’s Indian division are providing their services for the entire gamut of IBM’s businesses, right from researching on emerging technologies like computer vision for self-driving cars, artificial intelligence etc. to managing the computing needs of global giants like Shell and AT&T. Currently, there’s also a team that is working together with Sesame Street producers to teach vocabulary in a fun way to kindergarteners in Atlanta.

Taking about the importance of IBM India to New York Times, Vanitha Narayanan, chairman of the company’s Indian operations said, “IBM India, in the truest sense, is a microcosm of the IBM company.” Narayanan works out of IBM’s main campus in Bangalore.

Opening its first Indian offices in Mumbai and Delhi in 1951, IBM has now spread across the whole country and has offices in Bangalore, Pune, Kolkata, Hyderabad, and Chennai.

So, the question that arises here is, why India? The reason is, the cost factor. Setting up a strong grounding in a developing economy full with knowledgeable, educated engineers/researchers helps the giant in keeping down its cost, which has lately been an extremely crucial challenge for IBM as it has produced 21 consecutive quarters of revenue declines. The decline in revenue can be largely attributed to IBM’s dismal performance in rebranding and keeping alive its main business of supplying tech services to governments and corporations.

Not only is the land, water, air cheaper in India than the US, according to data posted by the research firm Glassdoor, the salaries paid to Indian workers are one-half to one-fifth those paid to Americans. This is what makes India a lucrative bet for IBM.

American tech companies shifting jobs abroad isn’t something new. It’s has now been happening for a couple of decades now. In addition to IBM, some other tech biggies whose majority of workers are employed outside of the US include Dell and Oracle. But, what makes IBM standout from them too is the fact that the company employs more people in a single foreign country than it does at its own home. According to statistics available, IBM’s employment in India has almost doubled in the last decade and at the same time, its workforce in the US has thinned considerably through frequent rounds of buyouts and layoffs.

While expanding its base in India, IBM also wants to make sure that they don’t earn the ire of anyone in its home country, especially its President Donald Trump who’s openly against American companies shifting their jobs abroad. Almost immediately after Trump acquired charge of the White House, IBM’s chief executive, Ginni Rometty, who has played a crucial part in carrying IBM’s India expansion strategy when she was head of IBM’s global services division, pledged to create 25,000 new American jobs. She also discussed plans with the US government on ways to modernise the technology they’re employing right now and how they can together work towards expanding the tech training for people without college degrees. In fact, Rometty also became a part of the President’s highly controversial, now-defunct business advisory councils.

Interestingly, IBM’s journey in India hasn’t always been so smooth. Following a dispute with the central government about foreign ownership rules, the company had left the country completely in the year 1978. But, the company soon came back to India by forming a joint venture with Tata in the year 1993. While on its return, the plan was just to assemble and sell personal computers and make money, IBM soon realised that vast potential that India as a country had to offer, both as a market and a base to serve global customers. The company soon took full control of its joint-venture with Tata and formed an Indian branch of its research labs.

This development was first reported in The New York Times.

Post a Comment

Previous Post Next Post
Like this content? Sign up for our daily newsletter to get latest updates.