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Xerox CEO, an Obama appointee, may send jobs to Indian firm

Patrick Thibodeau | May 23, 2011
Xerox employees told last week of possible deal with Indian offshore firm HCL.

McKee said the HCL partnership is being explored "to help us improve the efficiency and effectiveness of our global product engineering operation. We have great skills and talent in our organization, yet we don't have the scale necessary to be a leader in all areas," he said.

"It becomes increasingly clear that to win, we have to partner with other industry leaders," McKee said.

Among the topics being discussed by Xerox employees is a remark made by Vineet Nayar, the CEO of HCL Technologies, in 2009 where he reportedly called most American college graduates "unemployable."

The only prior indicator that changes were ahead at Xerox was an internal webcast earlier this year describing a plan to cut some research and development engineering costs to one-third of current levels, the affected employee said. Asked about that, McKee said, "we have never said we would reduce R&D spend." The company has said "that we will be shifting our revenue mix to a higher percentage of services, a business that is targeted to grow between 6 and 8% by 2012. To support that, we have clearly indicated our R&D focus will also shift to a services-led, technology-driven business."

He added, "More than half of our revenue now comes from services, we will continue to shift R&D to support the direction the company is moving in."

Burns will have a "huge impact" on what happens to former Xerox employees," said Ron Hira, an associate professor of public policy at the Rochester Institute of Technology who has testified in Congress about the impact of outsourcing. Among the things Xerox will control is how many employees are retained and how many will be transferred to HCL.

"Xerox will also control whether HCL hires American workers or brings in guest workers on H-1B and L-1 visas," Hira said.

What typically happens in an outsourcing agreement is that some workers will be laid off, generally those who are older and have higher salaries, Hira said.

If Xerox follows the practices of other outsourcing agreements, Hira said "that some Xerox workers will be kept on in a transitional phase where they will be laid off some months in the future, but they will be asked to train their HCL replacement. Sometimes this is sweetened with severance, but given the current job market, that sweetener won't be very generous."

HCL, according to Hira's research, largely relies on L-1 visas to transfer its overseas employees to the U.S. Last year, the company used 85 H-1B visas and 2,935 L-1s.

 

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