Jul 11, 2007

Offshoring, An Interesting Article From The People’s Daily Online (Of China)

I ran across this by accident, I thought that their prospective was interesting:

“Jobs are usually slashed in developed markets, such as the US and Europe. But in emerging markets, including China, jobs are usually maintained and even added.”

“Citigroup Inc in April said it would eliminate 17,000 jobs, or 5 percent of its workforce, as part of a broad restructuring plan designed to cut costs and bolster its stock price.”

“It also declared that more than 9,500 jobs will be moved to lower-cost locations worldwide, including China and

“The effects of the restructuring will be felt hardest in Raleigh, North Carolina, where roughly 20 per cent of jobs will be cut or relocated to emerging markets like China, India and Eastern Europe.”

"The main driver of (the layoff) trend is cost savings, considering how much lower the cost of labor is in developing marketplaces," said Leigh Baker, senior advisor of human resources consulting services firm New Leaders International.”

“A survey from the London-based Economists Intelligence Unit showed that China's average labor cost increased $1.36 per hour in 2005, up 72 percent by 2001, and is to double to $2.70 per hour by 2010.”

"Those senior managers are assigned to implement corporate production, supply, financial and other business systems, all of which require in-depth knowledge of the systems themselves and long work experience in MNCs," said Baker, a veteran MNC consultant.”

“Baker forecast that MNCs will ultimately phase out their senior foreign managers and replace them with Chinese managers they have been training to take over.”