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A California backlash rises over foreign IT worker replacements

Patrick Thibodeau | July 2, 2015
California lawmakers have taken steps to attack the use of foreign labor to replace U.S. workers. One effort seeks to use the state's regulatory powers to prohibit utilities from shifting jobs overseas.

The bill "has the potential to jeopardize the safe, reliable operation of electric service and thousands of California jobs," SCE told lawmakers. The utility went on to note that the vast majority of its contract workers are in California.

It's not clear whether California's anti-offshoring bill will force SCE and any other utility that has previously offshored work to return that work to U.S. soil. But California lawmakers are applying heat in other ways.

The resolution seeking a federal investigation into H-1B use is broader and goes beyond utilities. The resolution is sponsored by California Assemblyman Eduardo Garcia (D-Coachella). "It is unfortunate that a program aimed at spurring economic growth and job creation may be used to lay off our U.S. workers," said Garcia in a statement.

Garcia's bill doesn't name SCE specifically, although the statement is clear about the bill's motivation. It cites the SCE layoffs as well as those at Disney.

Assemblyman Donald Wagner, (R-Irvine), said the resolution cited SCE without offering proof about what occurred.

"I think it's a really bad form for us to start calling out some of our own employers when we aren't a court and don't take evidence," said Wagner, in an interview. He opposed the resolution.

The California legislation could hurt offshore IT service providers."The public utilities market is an important and growing market for a number of the Indian service providers," said Peter Bendor-Samuel, founder and CEO of Everest Group, an outsourcing consultancy and research group. For Tata Consultancy Services and Wipro, public utilities "has been consistently one of their fastest growing segments over the last two years." The importance of this segment is growing as other industry segments slow, he said. "This bill and the protectionist sentiment underlying it is concerning for the industry," said Bendor-Samuel.


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