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AT&T Reportedly To Cut Hundreds of US Tech Jobs

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SAN ANTONIO, Sept. 29, 2006 -- A week after AT&T announced it would end outsourcing of customer service to offshore providers, Information Week reported today that the company is planning to dramatically increase its use of India-based labor, at the expense of possibly hundreds of US tech jobs.

According to the article, anonymous sources said AT&T is expanding its relationship with Indian outsourcer Tech Mahindra, which is partly owned by British Telecom, and will drastically reduce the number of US-based contract employees it uses for internal software development.

"AT&T is sending out far more jobs than it's bringing back," one of the sources, reportedly an insider in the company's customer-operations department, was quoted as saying.

The article said the plan was unveiled to middle management earlier this month by AT&T senior executives. It calls for the company to slash the number of IT contractors in use throughout the US and send the work to Tech Mahindra's Indian operations. US-based contractors in Orlando are presently earning between $60,000 and $80,000 per year, according to the article. Programmers in India typically earn at least 60-percent less than their American counterparts, Information Week said.

Sources reportedly said this process is being repeated throughout the company and could ultimately affect at least hundreds of tech jobs. They reportedly said AT&T's aggressive outsourcing push is an effort to realize $15 billion in operational saving promised to shareholders after its merger with SBC Communications last year.

Last week, AT&T said about approximately 2000 technical support jobs that were previously outsourced overseas would be returned to the US. In a Sept. 21 press release titled, "AT&T to Bring 2000 Outsourced Jobs In-House," Bill Blase, executive vice president-Labor Relations, said, "This is one more example of how we're working together with our union to add jobs in growing parts of our company." 

AT&T said at the time that it was assessing where to locate those jobs, which would be added to the AT&T payroll by the end of 2008.

According to Information Week, "AT&T's apparent decision to repatriate some jobs while outsourcing others reflects a growing dilemma faced by many US companies. They're looking to cut costs by outsourcing routine work to low-cost, offshore service providers. At the same time, many fear such moves will alienate customers. AT&T has apparently decided to maintain customer-facing jobs in the US while shipping out behind-the-scenes operations."

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Sep 2006
AT&TBritish TelecomCommunicationscustomer serviceIndia-based laborIndian outsourcerInformation WeekNews & Featuresoffshore providersTech Mahindra

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