Offshore competition makes layoffs a certainty, consultant says


Jamie Giovanetto has made layoffs — preparing for and handling them — an area of expertise.

In classes, he helps his students confront their concerns with advice on how to avoid the job-cutting ax as well as how to prepare for it.

And he now has a map where he can point to areas in the U.S. where job anxiety, particularly from offshore competition, are likely to be the greatest over the next several years.

The Brookings Institution last week released a study that lists areas in the U.S. where offshoring has hit IT and back-office jobs the hardest. The anticipated effect of offshoring on metropolitan areas through 2015 has been mapped as well, and Giovanetto held up the map at the start of his class at IBM’s Share conference in Tampa last week to illustrate one simple point.

“The only state that doesn’t have a metro area affected by offshoring is Wyoming,” said Giovanetto, who faced a layoff of his own and today is an independent IBM consultant. He teaches professional development classes as an avocation at the Share conferences.

Just attending Giovanetto’s class can make you feel uncomfortable, because it involves thinking about something most people would rather not imagine. But concerns about job security can pop up in any forum. For instance, in a class on telework, a woman asked whether a company’s decision to allow teleworking also makes it more comfortable with using remote workers and offshoring. “We are just afraid of that,” she said. In interviews, several people who had attended Giovanetto’s class offered a range of views about current trends.

Paul Poppell, who manages enterprise operations and is also an MVS mainframe programmer, said automation is more of a threat than offshoring.

“Every enhancement from IBM has reduced the skill set of my particularly specialty,” Poppell said. “There has not been an enhancement out of that product set that has increased the complexity or the skill set required to install that operating system.” He works at an educational institution he didn’t want identified.

Although Poppell said he believes IT jobs may be increasing overall, the skill sets are shifting, and not to the benefit of MVS programmers. “Unfortunately, it’s one of those things like making horse collars — the good ones are going to do well; the bad ones are going to fall off the face of the Earth,” he said.

Jane Shipman, who works on a mainframe computer at a large business, said the market has changed for IT workers and the days of easily finding a new job are gone. “I think we’re experiencing what other professions have experienced for a while, and we don’t like it any more than they do,” she said.

But Shipman sees positive things in her work environment. The company hasn’t outsourced its data center, because it believes that “your own people are best situated to control your cost.” And she also believes that her mainframe skills give her an edge in this market. The mainframe is “not going away, and it’s not the hot thing that people are training on,” she said. She also sees the retirement of many longtime mainframe workers creating a skills shortage.

Ken Williams, who works in a test environment at a large financial services firm, said offshoring was a worry for several years but is less so now.

“Everybody was afraid it was going to take jobs,” he said. “In my environment, it’s thought about much more positively at this point.”

Williams said offshore developers are supplementing work, and their efforts are increasing his workload. It has also put demand on environments around the clock. “It’s not replacing anybody; it’s increasing our capacity,” he said.

The Brookings study looked at the impact of offshoring in major markets and found that it may eliminate as many as one in five programming, software engineering and back-office jobs in certain markets, such as Boulder, Colo., San Francisco and San Jose. In 28 metropolitan areas, 2.6 percent to 4.3 percent of the jobs may be lost to offshoring by 2015, with much higher percentages for those working in IT.

Robert Atkinson, a senior fellow in economic studies at Brookings and co-author of the study, said that the reaction from reading the report shouldn’t be panic, and he believes there will be offsetting job increases. Demand for higher-level occupations, such as integrators, may increase. “Certain jobs are more risky than others,” he said.

Ron Hira, a vice president of IEEE-USA, said the Brookings report will be a wake-up call for metro areas with vulnerable labor forces, but he also believes that the interpretation of the data understates the impact of offshoring and that job losses will be higher. To help illustrate the trend, Hira said, Brookings should have cited some specific examples, such as Accenture Ltd.’s recent announcement that it will soon have more employees in India than in the U.S.

What is more certain is that Giovanetto will return to teach his class. He worked for a large vendor in 1999 when he was laid off, but he had seen the warning signs and had a contract to work as an independent consultant the following day. He shared his lessons from that experience, as well as those he has gleaned from hundreds of others who have attend his classes at the IBM Share user conferences.

A layoff can come for many reasons, such as a merger or spin-off or economic changes. Most workers will detect some warning signs, such as seeing a manager’s office doors closed more often and having formerly positive feedback on job performance suddenly turn negative, Giovanetto said. Memos outlining new cost-saving initiatives or “stupid cost-cutting” measures, such as reducing office supplies, are another tip-off, he said. He recommends reading a company’s Securities and Exchange Commission filings, as well as networking with customers and competitors who may have insights.

Avoiding a layoff requires you to give the best you can on the job, but even little things can make a difference, Giovanetto said. Working at becoming a subject-matter expert and keeping a clean, organized and professional-looking work space may lead to better assignments. “It’s just an appearance thing, but it does pay benefits,” he said.

If a layoff happens, remain calm, take notes and leave with your dignity, Giovanetto advised. “There is nothing you can say or do to change the process,” he said.


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