Outsourcing - Dominique

Outsourcing.

Hewlett-Packard today declined to comment on industry speculation the company plans to outsource the jobs of an estimated 500 staff working in its support and service operation located in Rhodes, Sydney, offshore.
A well-placed source has told ZDNet Australia that HP has given the project management team overseeing the Rhodes operation a maximum of eight months to migrate its internal and corporate desktop support functions, employing 300 people, to Bangalore, India.
The source also claimed that HP was planning to axe a further 200 jobs at the Rhodes facility by outsourcing its operations management centre functions to China.
ZDNet Australia contacted HP several times for comment on the allegation. HP corporate communications manager, Hugh Scott said the company could only provide a "no comment" response at this stage.
The centre has been operating in Australia for four years. Work to establish the centre began in 1998 and it started operating in 1999. In 2000 it was upgraded.
The centre currently serves HP's key corporate clients such as Vodafone and Optus, and its internal staff.
The source claims the outsourcing deal is an example of the cost-cutting mentality that has dominated the company's strategy under the stewardship of Carly Fiorina.
"The problem I see with all of this is that Australia is gradually making other countries rich, these 300 people will go on the dole because there is no other work around," said the source.
"The corporate giants are paying HP, HP is paying India but there's no money coming into Australia. Its all money flowing out and you've got 300 more people sitting on the [labour] market".
Last week a McKinsey & Co released a report forecasting IT-enabled Services-Business Process Outsourcing (ITeS-BPO) would grow 60 percent to US$2.4 billion over the 2003 fiscal year.
A swathe of the IT industry's heavy-hitters including Dell, IBM, Accenture and Compaq have outsourced their functions to Indian-based operations over the last 12 months. Australia has not been immune to trend.
Last August Compaq moved its research and development centre from Queensland to India.
In November, documents leaked from within Qantas revealed that the airline's chief information officer, Fiona Balfour, told a meeting of ranking IT executives that outsourcing to India was a long-term strategy for survival.
In December 2001, the Department of Foreign Affairs and Trade alarmed the Australian IT industry when it was revealed that it had engaged activity widely viewed as encouraging Australian business to seek opportunities to cut-costs by transferring local functions to India.