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Home / Opinion / Online Views /  IBM employs more staff in India than its US workforce

Ever since International Business Machines Corp. (IBM) stopped disclosing the number of employees by region in 2010, experts tracking the company have been predicting that the company’s India workforce was set to become its biggest pool of engineers globally.

That tipping point seems to have arrived, at least according to the US technology news website Computerworld.com.

On Thursday, Computerworld.com reported that IBM has 112,000 workers in India, more than some 100,000 it employs in the US, citing an internal document reviewed by the website.

Big Blue, a name IBM acquired from its blue-painted mainframe computers of the 60s, along with Accenture Plc has come a long way since its information technology (IT) outsourcing business was challenged by rising Indian rivals Infosys Ltd and Tata Consultancy Services Ltd in the late 90s. Back then, Indian tech firms offered to deliver software projects from the country at rates that were one-fourth of what they cost in the US.

Both IBM and Accenture have been hiring hundreds of thousands software engineers since then in order to compete better, while bidding for fresh outsourcing business from top customers such as General Electric Co. and Citigroup Inc.

From less than 10,000 people in 2002, IBM’s India operations now account for nearly $3 billion in revenue including the business it earns from serving local customers such as Bharti Airtel Ltd and Tata Steel Ltd. With 2011 annual revenue of $106.91 billion, IBM’s global staff strength is 433,362 globally.

“It is IBM’s policy not to comment on the alleged authenticity of internal documents," said an IBM spokeswoman in an email.

Last year, IBM said its India staff would receive restrictive stock units worth $1,000 as the company started its centenary celebrations.

According to at least three company officials who requested anonymity because IBM does not disclose staff numbers, the India headcount crossed 120,000 last year itself.

The last time that IBM made a public statement about its US workforce was in congressional testimony in the fall of 2009, when it put its US workforce at 105,000. It was at 121,000 at the end of 2007, and more in previous years, the Computerworld article said.

While IBM and Accenture have adopted the low-cost outsourcing model, their Indian rivals now seem to be trapped in their existing, labour-based growth.

For years, Indian software firms have been hiring thousands of engineering graduates and building large campuses for training and housing them. The so-called “pyramid model" that sees the entry of a large number of fresh engineering graduates every year brings down the cost of software development and maintenance projects.

Clearly, the battle for IT services has moved on from just throwing low-cost engineers to write software codes and maintain applications, to chasing high-value projects that fetch premium business.

Already, software robots and humanoids from US-based IPsoft Inc. and British start-up Blue Prism Ltd are rapidly rendering irrelevant the political and economic debates about offshoring of software and back-office projects. They are doing this by automating more than half the projects they undertake, and by solving technical glitches at a speed (in seconds) that human engineers cannot match.

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