Out Of India

More American Companies Are Sending Jobs Overseas

For decades, American manufacturers of everything from blue jeans to semiconductors have searched the world for the cheapest labor they could find.

It may have cost hundreds of thousands of American jobs, but it's made American products more affordable. Now, some of the most familiar companies -ones we deal with every day - are moving a whole new class of jobs overseas.

They call it outsourcing. Not the old economy assembly line jobs, but jobs in the new economy -- anything that involves a computer or a telephone.

As Correspondent Morley Safer first reported last January, that person at the other end of the line is more likely to be in India than in Indiana.

To many American employers, India is Nirvana. It has a stable democracy, an enormous English-speaking population, and a solid education system that each year churns out more than a million college graduates -- all happy to work for a fraction of the salary of their American counterparts.

And India epitomizes the new global economy -- a country that often looks on the edge of collapse, a background of grinding poverty, visually a mess.

And yet, whether you know it or not, when you call Delta Airlines, American Express, Sprint, Citibank, IBM or Hewlett Packard's technical support number, chances are you'll be talking to an Indian.

"We're doing customer servicing there," says Raman Roy, chairman of Wipro Spectramind, a leading outsourcing company. He helped start the Indian call center boom in the '90s when he came up with a business plan for American companies to direct their calls to India.

Wipro had to build their own generators and their own satellite phone systems. The call centers are cool, self-sufficient islands in an uncertain sea of chaotic Indian street life. Inside, round-the-clock, they keep America on the line.

"We service the globe. We service all parts of the world irrespective of what time it is here or there," says Roy.

New Delhi is nearly 11 hours ahead of New York, so manning the phones is largely night work. By day, the agents - as they're called - are dutiful Indian sons and daughters. By night, they take on phone names such as Sean, Nancy, Ricardo and Celine so they can sound like the girl or boy next door.

"The real name is Tashar. And name I use is Terrance," says one representative.

"My real name is Sangita. And my pseudo name is Julia," says another representative. "Julia Roberts happened to be my favorite actress, so I just picked out Julia."

American movies are part of an agent's training in how to sound all-American.

Lavanya Prabhu is a call center trainer who guides young Indians through the labyrinth of American English. And she says she is able to pick up some of typical American accents while instructing her students.

"Well, you have Brooklyn. 'You walk the walk and you talk the talk.' And you have the southerner's thing. 'Oh hello, there. What can I do for you today,'" says Prabhu, who spends most of her time trying to de-Indianize her countrymen.

But it's difficult to get in. In fact, Prabhu says they accept approximately five applicants out of 100 applications.

On any given day in New Delhi and Bombay and Bangalore, the call goes out for new call center recruits as more and more American companies come calling. The call center employees earn $3,000 to $5,000 a year, in a nation where the per capita income is less than $500. The perks include free private transport to and from work plus the sheer heaven of an air-conditioned workplace.

There are few aspects of your telephonic life that do not sooner or later end up in India - from someone talking you into a new credit card, to your
attempt to return your mother-in-law's wonderful gift, to making sure you've paid that bill.

Debt collection is, as it has always been, a growth industry.

Arjun Raina, a Shakespearean actor, helps debt collectors and others trying to wheedle money out of you play the part.

"There's also a hierarchy of bill collectors. There's the sweet gentle one who's first calling in and saying, 'Just reminding you,' right? And then the toughies come in, you see? And the toughies have it quite good because the, for example, a lot of men have no problem being aggressive, right? Accent doesn't matter," says Raina. "You know, once I'm being aggressive with you, I don't have to be polite and neat. I can be tough with you, right?"

Partha Iyengar, an analyst in India for Gartner, an American research company, says this is probably the best example of globalization.

"Absolutely. We've had globalization in the manufacturing sector with the auto industry, and Japan really emerging as a major auto power. We've had globalization in the low end manufacturing industry with China emerging as a global power," says Iyengar. "But this is the first time in the knowledge industry we have globalization impacting two countries at such a large scale -- India and the U.S."

The U.S. government does not keep track of how many American jobs have gone overseas, but there are estimates that in just the last three years, as many as 400,000 jobs have gone to places like China, Russia, and India.

"The reason the companies are coming here is to really be more competitive and that cannot be bad for the U.S. economy," says Iyengar, who believes the effect of outsourcing on the Indian economy has been quite dramatic.

"There are some estimates that say that the whole outsourcing revolution, if we can call it that, will really be one of the key factors in moving India towards developed economy status."

At which time, India would probably outsource to China, for the same four reasons the U.S. outsources to India -- money, money, money and money.

What would be the savings to a multi-national company?

"You save anywhere between 30 to 50 percent," says Wipro chairman Roy.

And this is enough to dazzle even the most patriotic CEO, and so, JP Morgan Chase is hiring Indian stock analysts.

Indians also answer some of the Amazon.com's e-mail. And AOL and Dell send technical calls to India. Plus, if your doctor prescribes an MRI at Massachusetts General Hospital in Boston, it may be processed by a radiologist in India.

So what's left? Well, there's taxes. Last year, only a thousand U.S. tax returns were prepared in India. This year, there were 25,000.

"And next year, people are estimating that about 200,000 returns will be prepared in India," says Dave Wyle, a 31-year-old American entrepreneur who expects to make a fortune on outsourcing for U.S. accounting firms through his company, Sureprep, based in Bombay.

What makes India such a good candidate for outsourcing taxes specifically?

"The cost of the labor - it's a fraction of the cost," says Wyle. "You might be paying somebody $300 to $400 a month there that might make $3,000 to $4,000 a month or more in the United States."

Sureprep currently does work for more than 150 U.S. accounting firms, and its client list grows larger each month.

"These accounting firms range from small local firms to right now, it's about 20 of the top 100 firms including one of the national firms," says Wyle.

Those American firms scan an individual's tax documents into a computer. An Indian accountant logs on, fills out the return on his computer, and then it's printed out in the U.S., checked, signed and sent to the IRS.

But most people regard their tax returns as among the most private things they have. Is there any risk of that security being broken with tax returns flying through the ozone?

"The type of security you see in this facility is generally much more so than you would see in any U.S. accounting firm. Everything is paperless," says Wyle. "You'll notice in the facility there's no pens or papers on the desk. There's no printers in the work room. Everything's done on screen."

Young successful businessmen like Wyle and Roy no longer view the world as a place with boundaries.

"This is a global economy," says Wyle.

"Geography is history. Distances don't matter anymore," adds Roy.

But beyond the success and the money that's being made in this business, there's a terrific sense of national pride that India is making its mark in this very sophisticated way.

"There is a huge amount of nationalistic pride," says Roy. "Because we want to show that as a work force, as a labor pool, we are equivalent to, if not better than, anybody else. Anywhere in the world."

60 Minutes spoke to half a dozen major U.S. companies about why they outsource to India.

They all said that the savings they make are passed on to their customers, along with better service. Since 60 Minutes first broadcast this story, the loss of American jobs to developing countries has become a major campaign issue. But American companies aren't the only ones who are outsourcing -- so is the government. At least 18 states are now outsourcing welfare benefits calls to Indian operators.