Telstra outsourcing stirs exploitation claims

Mention the dreaded “outsourcing” word at Telstra Corp. Ltd., throw in a reference to a few Indian computer programmers and IT staff are guaranteed to go into a spin while the union tells tales of worker exploitation and politicians offer financial assistance on talk-back radio.

The fiasco began in Melbourne Tuesday with a Herald Sun report that Telstra has employed 100 Indian programmers paying each as little as A$12,000 (US$7,452) a year and creating a sweatshop that was undercutting Australian IT staff.

“Shocked” and “calling on management to come clean”, the Community and Public Sector Union (CPSU) started feeding the rumour mill with whispers of Indian workers mysteriously appearing at Telstra’s (Melbourne) head office on level six.

One media outlet was even claiming it had located five of the Indian programmers living in a one-bedroom flat just down the road.

While Telstra confirmed staff were being provided by offshore software development companies Infosys Technologies Ltd. and Satyam Computer Services Ltd. on a project-by-project basis, the palpable fear of IT staff at the telco came as no surprise as the statement was hot on the heels of an internal memo issued by Telstra CIO Jeff Smith outlining an IT review to improve efficiencies.

A Telstra spokeswoman confirmed the existence of the memo, adding that processes and IT systems are under review as part of a broader IT strategy; the union claimed there was plenty of duplication of IT systems and that it is always unnerving for staff when scoping work is under way.

So if Telstra did have any plans to make greater use of outsourcers it was forced to issue a statement within hours declaring it had “no intention of replacing any of its IT employees with staff of external IT providers from India or elsewhere in the world”.

Infosys Australia and New Zealand manager Ananda Rao told Computerworld the company’s relationship with Telstra began 22 months ago and its staff were paid A$300 (US$186) a day just in allowances and this is in addition to salaries.

He said staff are sourced from the likes of IBM Corp., Accenture Ltd., DMR Consulting and other blue-chip names adding “we don’t just provide people, we provide solutions”.

The solution on offer from Victorian Premier Steve Bracks was financial assistance to Telstra to ensure it employed local talent.

“There is an offer there if (Telstra) wants it,” he told radio station 3AW, even if that meant “short-term assistance for some long-term benefits to Victoria”.

When Computerworld asked Telstra if it was going to take the cash while it was on offer the spokeswoman said it wasn’t necessary because no staff were under threat.