Engineering Wednesday - IBM is the latest major company joining the ranks of those bleeding cash after heavy outsourcing to India. The pattern is now familiar and predictable.

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Engineering Wednesday - IBM is the latest major company joining the ranks of those bleeding cash after heavy outsourcing to India. The pattern is now familiar and predictable. (xcancel.com)

The post: Engineering Wednesday

IBM is the latest major company joining the ranks of those bleeding cash after heavy outsourcing to India.

The pattern is now familiar and predictable.

Companies chase lower labor costs by moving critical engineering, development, and support functions overseas. At first the spreadsheet looks great. Then reality sets in. Quality drops. Innovation slows. Institutional knowledge walks out the door. Products suffer. Customers notice.

Apple lost intellectual property on next generation phone designs and delivered a badly received OS launch after pushing more work offshore. Microsoft has bled money on multiple fronts while dealing with poor Windows 11 releases and quality issues tied to heavy offshoring and layoffs of experienced staff. Coinbase and Opendoor both pulled back from heavy outsourcing after seeing the damage it caused.

The common thread is leadership captured by short term financial thinking and foreign networks. Once the hiring pipeline and decision making get dominated by one nationality or outsourcing model, the company loses the ability to course correct. They double down even as the failures mount because the people in charge have no real attachment to the long term health of the American operation.

Let's be real - here is the magic that Indian CEO's bring to the game. Replace Americans in America - that's it. That's their secret sauce- they can make a billion dollars appear like magic by replacing a few thousand American workers.

*voila..abra cadabra - John Smith is out the door and Rajish Subramarian takes his seat.

Meanwhile, watch the customers revolt and the American institutions flounder.

This is not incompetence by accident. It is the logical outcome of treating American technical talent as an expensive inconvenience instead of the irreplaceable core of the business.

Passionate, experienced engineers who understand the product, the customer, and the history of the systems are what create lasting success. Replacing them with cheaper, less accountable labor looks smart on a quarterly earnings call. It destroys companies over time.

The organizations that figure this out and bring back real ownership and domestic competence will survive. The ones captured by the replacement mindset will keep bleeding until someone else takes their market.

Question:

Have you watched a company go heavy on outsourcing or H-1B labor only to see quality, innovation, and profits suffer as a result?

Drop what you observed.

The post: Engineering Wednesday IBM is the latest major company joining the ranks of those bleeding cash after heavy outsourcing to India. The pattern is now familiar and predictable. Companies chase lower labor costs by moving critical engineering, development, and support functions overseas. At first the spreadsheet looks great. Then reality sets in. Quality drops. Innovation slows. Institutional knowledge walks out the door. Products suffer. Customers notice. Apple lost intellectual property on next generation phone designs and delivered a badly received OS launch after pushing more work offshore. Microsoft has bled money on multiple fronts while dealing with poor Windows 11 releases and quality issues tied to heavy offshoring and layoffs of experienced staff. Coinbase and Opendoor both pulled back from heavy outsourcing after seeing the damage it caused. The common thread is leadership captured by short term financial thinking and foreign networks. Once the hiring pipeline and decision making get dominated by one nationality or outsourcing model, the company loses the ability to course correct. They double down even as the failures mount because the people in charge have no real attachment to the long term health of the American operation. Let's be real - here is the magic that Indian CEO's bring to the game. Replace Americans in America - that's it. That's their secret sauce- they can make a billion dollars appear like magic by replacing a few thousand American workers. *voila..abra cadabra - John Smith is out the door and Rajish Subramarian takes his seat. Meanwhile, watch the customers revolt and the American institutions flounder. This is not incompetence by accident. It is the logical outcome of treating American technical talent as an expensive inconvenience instead of the irreplaceable core of the business. Passionate, experienced engineers who understand the product, the customer, and the history of the systems are what create lasting success. Replacing them with cheaper, less accountable labor looks smart on a quarterly earnings call. It destroys companies over time. The organizations that figure this out and bring back real ownership and domestic competence will survive. The ones captured by the replacement mindset will keep bleeding until someone else takes their market. Question: Have you watched a company go heavy on outsourcing or H-1B labor only to see quality, innovation, and profits suffer as a result? Drop what you observed.