Tech veterans squeezed out: Overseas hiring, ageism blamed

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Emanuel Sacks considered himself lucky. As a computer worker in a surging information economy, the 31-year-old father of four never had trouble finding work.

Then came his layoff 12 months ago from a $62,500-a-year job at a Virginia subsidiary of Chicago's MarchFirst, the now defunct Internet consultancy.

Since then, he and his wife have perfected his job-hunting routine. While she faxes his résumé — as many as 50 copies at a time — the 15-year veteran of companies such as America Online knocks on doors or makes follow-up calls.

The response so far? Three interviews. No offers.

Sacks, one of hundreds of thousands looking for work during a recession, blames the volatile tech industry's deep slump for his unemployment.

Yet he says he can't help but notice two trends: U.S. companies are moving computer jobs overseas, where labor costs are lower. At the same time, tech giants such as Motorola are taking advantage of a controversial government visa program to import workers.

"At the very least," Sacks said, "it would be nice to be able to get a job without wondering who I'm competing with. (But) it's an issue we stay off of because all it's going to do is raise emotions."

Anger about the H-1B visa program runs much deeper among some veteran computer programmers who, unlike Sacks, had trouble finding steady work even when the high-tech industry was booming in the 1990s.

These programmers, some with advanced degrees, prepared for what they thought would be plum jobs as part of an elite work force leading the nation's shift to an information age.

Instead, they say they're treated as disposable, much like factory workers who lost jobs in the industrial world's restructuring in the 1970s and '80s.

"I'm very tired of being the last one hired and the first one let go," said Annette Kelaiditis, 47, a Chicago-area software developer who's been out of work since June.

"We're treated as though we're production workers without any of the benefits of a union."

A flash point is the H-1B visa program under which U.S. companies, tech and nontech alike, received approval to hire 163,200 foreign workers during the year ended Sept. 30 — a period during which U.S. high-tech companies announced more than 520,000 layoffs.

Tech professionals represented 57 percent of the new visas in 1999, the most recent year for which occupational breakdowns were available. The Immigration & Naturalization Service is expected to announce numbers for 2000 soon.

The visa program allows employers to hire foreign workers who offer hard-to-find skills, at pay equivalent to U.S. workers, for up to six years.

Critics contend companies use the program to replace experienced employees with cheaper workers who are less likely to complain for fear of being deported.

Use of the program has continued to grow despite the recession.

At the same time, corporations are moving computer-related jobs overseas to countries such as India, Ireland and the Philippines, where wages are a fraction of U.S. salaries.

In India, for example, an employer could hire 14 software developers for the equivalent of one U.S. professional's salary, according to a study by META Group research fellow Howard Rubin.

Even though the total number of computer-related jobs is growing, this country's share of the estimated 5 million global corporate-information-technology jobs decreased to about 60 percent last year from 70 percent in 1998, when there were 3.5 million jobs, according to Rubin.

Rubin and others say the trend will continue. Forty-five percent of Fortune 500 companies use offshore programmers, about double the percentage three years ago, according to Rubin.

"It's the industrial age pattern being repeated in the information age," Rubin said.

"The first global economy in the information world isn't in the manufacturing of cell phones. It's in the global distribution of software and labor."

Mohanbir Sawhney, a professor at Northwestern University's Kellogg School of Graduate Management, points to GE Capital, the financial subsidiary of the diversified Connecticut-based giant General Electric Co., as the shape of the future.

GE Capital operates a center in India with more than 10,000 programmers that provides services not only for GE Capital's worldwide operations, but for all of GE.

"This trend of global deployment of resources, you're not going to stop it," Sawhney said.

That's little comfort to U.S. workers who are unemployed or say they can't find jobs commensurate with their skills.

Measuring the impact of the 13-year-old H-1B program is difficult because government data is out of date and incomplete. The program was expanded most recently in 2000 to provide nearly 600,000 new visas over three years.

A leading immigration expert, B. Lindsay Lowell, estimates 710,000 temporary visa holders are working in the country, though the percentage working in high-tech jobs isn't known.

The program is a source of anger for a grass-roots network of programmers who say they're losing jobs to temporary foreign workers.

Tech-industry advocates of the visa program, meanwhile, say it's vital. They point to U.S. Bureau of Labor Statistics indicating that unemployment rates for high-tech occupations are lower than for the work force as a whole.

Experts such as Rubin said certain specialties such as engineers may be scarce, but there's no shortage of IT workers.

"It would be very hard for me to understand how corporations could make a case (for importing workers) with the flood of Americans on the market," Rubin said.