blog Wondering how many staff the nation’s biggest telco Telstra has located overseas, following its decision over the past several years to end its previous moratorium on offshore support? Wonder no more, for, through the magic of journalism, the Sydney Morning Herald has discovered the full extent of the big T’s offshoring efforts. An article published this morning tells us (we recommend you click here for the full article):
“More than 10,000 overseas contractors are working for Telstra at the same time as the company slashes jobs at home to help boost profit. This represents about 26 per cent of the telco’s full-time workforce of 38,000, underscoring the extent of an aggressive outsourcing program to tap staff in low-cost countries.”
It’s no real surprise that Telstra has pushed this level of staff offshore over the past few years. Since it was fully privatised under previous chief executive Sol Trujillo half a decade ago, the telco has been acting less and less like a former government monopoly and more and more like an honest to God corporation like any other. Australia’s major banks, our miners, our retail chains and every other major business has been offshoring jobs like it’s nobody’s business for years. It’s no surprise Telstra is doing the same. The company hasn’t had many chances to grow its overall revenue under its current chief executive David Thodey — so logically, to enhance its profits, it has to cut its costs.
So is it a good thing that so many jobs are going overseas? Well, it depends on your perspective. If you believe in the free flow of capital, open markets and efficiency, as your writer tends to do (being an entrepreneur and capitalist myself), then you will doubtless believe Telstra’s offshoring efforts merely reflect work moving where it can be most efficiently done, and that often this frees up labor in Australia for higher order tasks that can’t be done overseas. However, as usual, Telstra’s unions don’t really agree. News.com.au reports (we recommend you click here for the full article) from the sidelines of Telstra’s AGM today:
“A handful of Telstra staff and Public Sector Union (PSU) members stood outside the company AGM at the Sydney Convention Centre entrance on Tuesday to protest against the 3157 job cuts Telstra has announced this year.”
Sounds pretty ineffectual. But then, Telstra’s been pretty good at converting its previously highly unionised workforce into small business contractors of late. We suspect the big T isn’t going to have to negotiate too hard with the unions on this kind of thing.
Image credit: Telstra
From a business perspective, offshoring is a great thing as it reduces costs and makes it easier to upscale and downscale.
But there are a couple of minor problems and im sure that there are more
1. Offshoring for some industries means that the industry is upskilling their overseas workers to the point where they can become a competitor.
Examples of this are textiles and manufacturing.
It means that we lose our lead in knowledge and therefore our edge in the market. If they can do your job as well as you can and they can do it more cheaply then how are you going to do business?
2. This is bad for the Australian economy as the money spent on outsourcing is a drain on our financial eco system.
Outsourced jobs are a financial drain on our economy because the money earned by those overseas does not come back to Australia. A dollar spent there does not earn a dollar for an Australian like it would if we were in sourcing.
For our society, outsourcing is a bad thing but sadly businesses must adopt it to be competitive
Once part of the PMG (Post Master General) a foundation branch of our fair Govt. Fully functional equitable & fair while prone to only to reasonable (human/nature) delay. Tourism, Employment, Natural Renewable Resources not to mention unknown leash-less foreign trade “agreements”, I for one would like to know if we have’nt become the boat people.
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