Link: http://cbs5.com/topstories/local_story_183215653.html
Finally, some good news for the American IT workers just in time for Independence Day. Let's hope that this really is the start of a long term trend of having good jobs created in the United States.
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Thuy Vu
Reporting
(CBS 5) SAN JOSE Like.com is a search engine company in San Mateo that lets you find pictures of similar products on the web. But like.com is doing something once considered unlikely.
It has shut down its engineering center in Bangalore, India.
"The engineering is what we've moved back here completely now," said CEO Munial Shah. "Another set of positions we've eliminated there and now we're hiring here."
That's right. Jobs once outsourced to India now moving back to Silicon Valley.
Why? Engineering labor costs are skyrocketing in India. Two years ago, an engineer's salary there was about $25,000 a year. Now, it's $75,000. That's about 75 percent of what the average engineer makes in the U.S.
"At 75 percent, yeah, you're still saving a little bit, but why would you want to have your team so spread apart, different time zones, everyone has to stay up late," Shah said.
Tim Bajarin runs Creative Strategies, a high-tech market analysis firm in Campbell.
"We're just really seeing now the first phase of this, with like.com saying it doesn't pay anymore with these prices," Bajarin said. "The top engineers over there are in high demand. In order to get them, you have to hire at higher prices."
But Bajarin says the salaries for lower-skilled jobs in Bangalore and other parts of India remain cheap.
"Certain IT level jobs, customer service, customer relations, data entry. I think a lot of that stuff will stay in an outsource mode unfortunately."
But for high-priced engineering jobs, "reverse offshoring" may soon be the new catch phrase. Which is good news for Silicon Valley, where tens of thousands of outsourced jobs have gone to India.
"I think all the companies are there, whether they say it or not, are there for the labor savings... But I think you'll see a different shift," Shah said.
Shah also said reverse offshoring is a trend for startups because of their limited cash flow. But whether the big companies will do the same remains to be seen.
==============================================
Finally, some good news for the American IT workers just in time for Independence Day. Let's hope that this really is the start of a long term trend of having good jobs created in the United States.
===========================================
Thuy Vu
Reporting
(CBS 5) SAN JOSE Like.com is a search engine company in San Mateo that lets you find pictures of similar products on the web. But like.com is doing something once considered unlikely.
It has shut down its engineering center in Bangalore, India.
"The engineering is what we've moved back here completely now," said CEO Munial Shah. "Another set of positions we've eliminated there and now we're hiring here."
That's right. Jobs once outsourced to India now moving back to Silicon Valley.
Why? Engineering labor costs are skyrocketing in India. Two years ago, an engineer's salary there was about $25,000 a year. Now, it's $75,000. That's about 75 percent of what the average engineer makes in the U.S.
"At 75 percent, yeah, you're still saving a little bit, but why would you want to have your team so spread apart, different time zones, everyone has to stay up late," Shah said.
Tim Bajarin runs Creative Strategies, a high-tech market analysis firm in Campbell.
"We're just really seeing now the first phase of this, with like.com saying it doesn't pay anymore with these prices," Bajarin said. "The top engineers over there are in high demand. In order to get them, you have to hire at higher prices."
But Bajarin says the salaries for lower-skilled jobs in Bangalore and other parts of India remain cheap.
"Certain IT level jobs, customer service, customer relations, data entry. I think a lot of that stuff will stay in an outsource mode unfortunately."
But for high-priced engineering jobs, "reverse offshoring" may soon be the new catch phrase. Which is good news for Silicon Valley, where tens of thousands of outsourced jobs have gone to India.
"I think all the companies are there, whether they say it or not, are there for the labor savings... But I think you'll see a different shift," Shah said.
Shah also said reverse offshoring is a trend for startups because of their limited cash flow. But whether the big companies will do the same remains to be seen.
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