Cringely's latest column is about IBM possibly cleaning house at Global Services to the tune of 100,000+ plus jobs. The plan is:

"For two years Big Blue has been ramping up its operations in India and China with what I have been told is the ultimate goal of laying off at least one American worker for every overseas hire. The BIG PLAN is to continue until at least half of Global Services, or about 150,000 workers, have been cut from the U.S. division."

If this turns out to be true, he makes an interesting point:

"It is especially disconcerting for an action of this scale to take place at a time when many companies (including IBM) are complaining about a shortage of technical workers to justify a proposed expansion of H1B and other guest worker visa programs. What's wrong with all those U.S. IBM engineers that they can't fill the local technical labor demand? They can't be ALL bad: after all, they were hired by IBM in the first place and retained for years.

What is unstated in this H1B aspect of the story is not that technical workers are unavailable but that CHEAP technical workers are unavailable.

Not trying to use this as a big bat to beat my point in, but I see the same type of issue with illegal immigration. I've heard the point that since there is such a massive influx of immigrants (an indeterminate amount illegal but ballpark estimates are 12 to 20 million depending on who's numbers you agree with) that there is market demand for their labor. There is a fine difference between a market for labor and a market for CHEAP labor. You can attach to the CHEAP labor category all the arguements you hear about how we've created a virtual slave class from illegal immigrants.

It's one of those catch-22 situations though where you can't sort out cause and effect. Would the market demand have been there and grown if the illegal immigrants weren't able to be paid crap wages in the first place? There's also a tangent I keep in the back of my head: The housing bubble. That bubble has popped, and over the next 5 to 10 years we are going to see a contraction like we've never seen before as the loose lending practices that helped fuel that bubble force people to pay the piper.

I can't give you raw data that is craved in situations like this, but I can give you anecdotal evidence. Back when the housing boom was in full swing and houses were popping up like mushrooms, you could take a look around at any construction site and understand at a glance where the majority of labor force came from. Two things came together: "Cheap" lending and "cheap" labor. Substitute "cheap" for "shady" and I think you see my point.

Interesting dynamics at play. The IBM thing is just another data source for it. If an 800 lb gorilla like IBM is firing US workers and replacing them in growing markets overseas, what's the case for more H1B's here? I know IBM is not "the" tech industry, but I think it's safe to say they are a bellwether.

Watcha thing? BTW I'm not trying to grind an immigration axe at this point, I know we've gone back and forth on that before. Honestly, I've grown to regard it as mostly academic at this point. I'm happy that Nashville has adopted 287G and is now enforcing immigration laws that the Feds didn't have the cajones to do. I can live with that.

Major outsourcing prediction from Cringely.

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The IBM project I am writing about is called LEAN and the first manifestation of LEAN was this week's 1,300 layoffs at Global Services, which generated almost no press. Thirteen hundred layoffs from a company with more than 350,000 workers is nothing, so the yawning press reaction is not unexpected. But this week's "job action," as they refer to it inside IBM management, was as much as anything a rehearsal for what I understand are another 100,000+ layoffs to follow, each dribbled out until some reporter (that would be me) notices the growing trend, then dumped en masse when the jig is up, but no later than the end of this year.
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All this is supposed to happen by the end of 2007, by the way, at which point IBM will also freeze its U.S. pension plan.
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But in the end they don't care, which shows that only the reaction of Wall Street matters anymore.