Telstra playing with workers lives

by Mike Newman

Telstra are throwing hundreds of IT workers out of their jobs and 
are trying to pass the blame on to their suppliers. However, the 
facts are clear — Telstra have actively manoeuvred to achieve 
millions of dollars in cost savings and have put in place a 
strategy of transferring IT development and support jobs from 
Australia to the city of Bangalore in India.

The recent reports of Telstra having clean hands when their IT 
supplier IBM decided to shift jobs to India are false to the 
core. What is not coming across in media reports is the fact that 
most of the job losses will fall on long-term Telstra employees 
who were transferred to IBM in 1997. This is a classic 
outsourcing operation — loyal workers shunted from what should 
have been a secure job in the public sector, first to a 
multinational services firm and then onto the scrap heap.

Having sold their workforce like serfs to IBM, Telstra are now 
complicit in getting IBM to sack them. Telstra like to paint 
themselves out of the picture — it is just up to their suppliers 
how they choose to staff or respond to contract requests. But 
just check back some months and we find Telstra actively courting 
Indian IT supplier Infosys.

In September 2003, they awarded Infosys a US$50 million contract 
for systems maintenance threatening up to 180 outsourced IT jobs 
at IBM. At this time Infosys boasted that they expected more 
contracts to come there way. More recently, Infosys bought up the 
Australian company Expert Information Services for $31 million, 
just when Expert is in the middle of negotiations to renew a 
contract with Telstra for maintenance of its Customer 
Relationship Management systems. What a coincidence!

Telstra pressure drives contractors offshore

The Infosys web-site is pretty proud in showing off Telstra's 
Chief Information Officer Jeff Smith's role in helping promote 
Infosys in Australia. Telstra management are using Infosys and 
other offshore IT outfits as a means of destroying hard won 
working conditions, smashing wage rates, and keeping the union 
out.

At the same time it divides workers, pitting Australian workers 
against workers in India in an attempt to drive down the wages 
and conditions of Australian workers.

Infosys is a massive global player with over 20,000 employees, up 
from almost 14,000 at the beginning of 2002. Profits and growth 
are frankly incredible — a phenomenal profit of US$246 million 
on revenue of US$1 billion and year-on-year revenue growth of 
almost 40 percent.

This compares to an established international Consulting services 
company Accenture, with 83,000 employees, reports two percent 
revenue growth and only US$550 million profit on US$13 billion of 
sales.

By forcing down wages and conditions, Infosys is growing 20 times 
faster with a profit rate at 25 percent or three times greater 
than a traditional and representative competitor. This a job-
wrecking juggernaut on the path of super-exploitation and super-
profits with Telstra forcing the pace.

It is clear that Telstra has been the key player in putting IBM 
and IT service providers under pressure, any attempts to look 
like an independent customer being offered a bargain is hypocrisy 
in the extreme — if anything they have forced the pace by 
courting, even advertising, Infosys, and forcing suppliers to 
search off-shore for cheaper labour if they want any chance of 
competing for a Telstra contract.

This is Telstra's reward to highly qualified and dedicated IT 
staff who have served the company for years.

But the plot thickens even more! On January 21 the Sydney Morning 
Herald reported that Telstra had set up a joint venture with 
Satyam — yet another India-based IT supplier, this time to move 
the development and support of Telstra's data warehousing 
(reporting and analytical functions) to, you've guessed it, 
Bangalore.

This time hundreds more locally based jobs, currently performed 
by consulting group Delloites, will come under the axe.

Manufacturing workers in the rich and industrialised world are 
used to seeing their jobs transferred offshore. Public sector 
workers, particularly in unskilled local government jobs, have 
seen their jobs contracted out cost-slashing transnationals 
determined on making a profit by attacking workers' wages and 
working conditions.

No worker safe

But this attack on a sector of skilled professional office 
workers will send a chill through millions of relatively well-
paid and highly qualified workers. On January 20 the Sydney 
Morning Herald reported that "According to some industry 
analysts, up to two million highly skilled IT jobs in the US will 
be outsourced to low-cost countries over the next decade."

Even Howard's government is stuck for a response — Costello gets 
on ABC radio to beg Telstra to reconsider, while Minister for 
Communications, Information Technology and the Arts, Daryl 
Williams flatly contradicts him. Williams's spokesperson thought 
outsourcing a grand idea. She was reported as saying, "Australia 
has much to gain from selective outsourcing of ICT services 
overseas, both from enhanced productivity and as a provider of 
high-end services".

Which section of the Australian workforce that Williams thought 
would benefit from losing their livelihood wasn't made clear 
however! Of course even Costello is forgetting that he had been 
fully briefed by Telstra on the Sanyan joint venture. He 
obviously felt it politically expedient to forget this while 
ticking Telstra off on the radio.

And after IT, what else could follow — incredibly, call centres 
have already started to relocate, and apparently with some 
sophistication. Call Centre workers in low-wage economies are 
often trained to speak and sound like they are from the client 
country — some even begin their shifts with a discussion on the 
news in the place they are meant to be working.

Union members will know of the dreadful working conditions 
imposed on call-centre workers in Australia — we can only wonder 
about conditions in India or the Philippines, the most popular 
destinations for off-shoring.

In an article on offshore outsourcing of call centres 
TechRepublic (an IT Web-Magazine) compares labour costs 
and explains that "The fully loaded per-agent cost in a US call 
center averages $40,000 per year; in India, it is only between 
$5,000 and $10,000".

Trade union campaigns

Basically, in the age of the Internet and cheap communications no 
job is really safe. Consider Accounting, Human Resources, 
Advertising, Client Relations, Logistics — there is no special 
reason for the profit-hungry to keep any costly back-office 
department at head-office when they can ship the job off to any 
company or country that charges a fraction of the cost.

Up to now union membership by IT workers has been patchy, mainly 
because job security and relatively high wages were almost 
guaranteed. Many developers and support staff opted out of full-
time work to go onto short-term but well paid contract work — 
with contracts typically lasting 3-12 months and usually being 
renewed. With the dotcom crash and slipping confidence in all 
things IT and now job competition on a global labour market, life 
has turned into a very ugly opposite.

Union reps and shop-stewards who have stopped trying to recruit 
IT workers are now much more likely to find a receptive audience. 
Defending IT jobs helps defend our administration, distribution, 
call centres and other areas that bosses are targeting for cost 
savings.

The threat of off-shoring provides trade unions a new opportunity 
to recruit and build in the IT area. The NSW Labor Council's IT 
Workers' Alliance is a great example of focussing on IT workers, 
and taking up their specific problems — recruitment agencies, 
contracts, unpaid overtime. This could be the basis of campaigns 
that draw workers into the union and help them defend themselves 
when the employers attack.