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  1. mapsonburt's Avatar
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    #26  

    Default Outsourcing is a fact of life, get used to it

    It is sad to see North American jobs leave for India and China, but the reality is that with competition, companies have to economize on their costs wherever they can. If they can get financial skills that are 25% less effective at 50% of the price, they have a fiduciary responsibility to their shareholders to do so. Having been to India 5 times, I can safely say that the skills aren't 25% worse either. They are degree junkies and are a lot more motivated than many North American resources. Yes, we've all heard lots of stories (and experienced) stories with the helpless desks being unable to solve issues but this is as much of an issue of moving support to a centralized help desk from onsite people coming to your desk than it is where the desk is. The net is, that the financial functions are back office, don't impact customers and RIM needs to slash costs. I'm glad to see they've done this.

    As for those lost North American jobs, we have to focus on things that can't easily be done by a $20/hour Indian working over a high speed internet connection. That's where the high paying jobs will be. As for the Indians... they have kicked nearly 500M people into the middle class in the last 10 years. Those folks are now all buying smartphones, cars, motorcycles, TV's, etc. That's a huge new market IF we are competitive. You can't sit behind tariffs these days... the world is moving to free trade. Get used to it and adapt.
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  2. timmy t's Avatar
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    Thread AuthorThread Author   #27  

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    Quote Originally Posted by mcmolineux View Post
    I was wondering why the stock spiked this afternoon. I was hoping it was for some BB10 excitement, but unfortunately this is probably the answer.
    This is not news. I am just reporting it hear because I just heard it.
  3. Roo Zilla's Avatar
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    Quote Originally Posted by mapsonburt View Post
    As for the Indians... they have kicked nearly 500M people into the middle class in the last 10 years. Those folks are now all buying smartphones, cars, motorcycles, TV's, etc. That's a huge new market IF we are competitive. You can't sit behind tariffs these days... the world is moving to free trade. Get used to it and adapt.
    500M Indians in the middle class? I don't think so. Their per capita nominal GDP is about $1400 with growth rates of 6% annually. Let's assume for a moment there's a billion people in India (there's more), and half the people make $0. That leaves 500M people making $2800. That's not middle class. India as a nation is ranked like 140th in the world in per capita GDP, far from middle class. There just aren't 500M middle class people in India, and about 30% of them live below the international poverty line. Yes it's true per capita income has tripled in the past 10 years in India, but they were so poor to start off with, it's just changes in degrees of poverty. India is like, by far the worst performing of the BRIC economies and one of the worst performers of South Asian economies.
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  4. ragdeiii03's Avatar
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    #29  

    Default RIM outsourcing Canadian jobs

    Companies in N A are insulting our intelligence by stating that they are reducing the size of their products to keep from raising prices. ( Same price, smaller product is really a price increase!!! ) Employees are keeping their jobs and the public ( consumers ) are on the losing end. Just something to think about.....

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  5. aragone79's Avatar
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    #30  

    Default Re: RIM outsourcing Canadian jobs

    It's called rationalization. And every business worldwide do this. It's all about money and making more profit. Nothing more or less.
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  6. bitek's Avatar
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    #31  

    Default Re: RIM outsourcing Canadian jobs

    Quote Originally Posted by timmy t View Post
    As a shareholder in RIM, I was disappointed to learn that RIM is outsourcing its Canadian accounting jobs to India. I was hoping for more from Thorsten.
    yes this sucks actually. now I can go and buy ..... Apple

    but seriously I was on the line to get Nexus 7. This just was the push I needed.

    Why to kill myself with playbook if I can just get it all android.

    again I am upset and not 100% rational at this point.

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  7. kfh227's Avatar
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    #32  

    Default

    Pfizer tried this with their IT. Actually, more than once thanks to their revolving door CEO "policy".

    Anyway. Two big problems. India:
    1) Is many time zones away. Meetings are a PITA because of this
    2) There is a language barrier. DUH ..... It's not as simple as providing "requirements".
    3) Not sure if Accounting will have the same problem as IT, but India, while cheap ... has some crappy developers. Probably has second rate accountants also.

    Thorsten is just pulling another page out of the CEO playbook. Oh, there are companies that provide knowledge sharing for execs. That's how things like outsourcing start. One guy tries it and it works. Everyone tries that guy's tool as hammer for different nails. Sounds like Thorsten is in that group. Sad.
  8. bluetroll's Avatar
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    #33  

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    it happens with every PUBLIC corporation.

    it's sad to hear people lose their jobs, but it's part of corporate life now. we live in a world of international business.
  9. Harborcoat's Avatar
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    #34  

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    Nobody tell OP about Heins.
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  10. Roo Zilla's Avatar
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    Quote Originally Posted by kfh227 View Post
    Pfizer tried this with their IT. Actually, more than once thanks to their revolving door CEO "policy".

    Anyway. Two big problems. India:
    1) Is many time zones away. Meetings are a PITA because of this
    I don't particularly have an opinion on outsourcing. Free trade is good, but not always. There's a couple of things I believe people don't understand about outsourcing in India. First, is that staff will work the hours you request. If you want them to match your business hours, they will do it.

    Quote Originally Posted by kfh227 View Post
    2) There is a language barrier. DUH ..... It's not as simple as providing "requirements".
    Indians speak English. The better educated ones speak better English. English is a requirement for almost any management position. India has the 2nd largest population of English speaking people in the world, second only to the US.

    Quote Originally Posted by kfh227 View Post
    3) Not sure if Accounting will have the same problem as IT, but India, while cheap ... has some crappy developers. Probably has second rate accountants also.
    I can't really comment on either, since I'm not in those fields. Since accounting is mostly software driven now, I would think it's not really a creative task anymore, the bulk of the work being basic data input, in other words, grind work.

    Quote Originally Posted by kfh227 View Post
    Thorsten is just pulling another page out of the CEO playbook. Oh, there are companies that provide knowledge sharing for execs. That's how things like outsourcing start. One guy tries it and it works. Everyone tries that guy's tool as hammer for different nails. Sounds like Thorsten is in that group. Sad.
    Well.... it's been a proven tactic for a while now. For better or for worse, it's here to stay.
  11. mcmolineux's Avatar
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    #36  

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    Quote Originally Posted by timmy t View Post
    This is not news. I am just reporting it hear because I just heard it.
    If you know, then others know, including some stock traders.
  12. njblackberry's Avatar
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    #37  

    Default

    Thorsten Heins (or Thor to those that apparently know him well on these boards) had to cut costs TO SURVIVE. This isn't rocket science thinking. Laying off employees and outsourcing to lower paying countries is not new. It is part of RIMs survival plan and a stated objective - to cut costs by $1bn by the end of fiscal year 2013. Selling the company planes isn't going to do that.

    Apparently he is doing a good job at it. And it you want RIM to survive (and then thrive when BB 10 comes out) you probably have to accept it.

    And many companies can deal with time zone issues. It is part of a global economy. Video conferencing is a wonderful thing. Face to face meetings 1-2 times per year go a long way. I just got back from India where I met with the teams we've outsourced. And they are doing what we ask them to do. At a fraction of what we could afford to pay in North America.
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  13. bambinoitaliano's Avatar
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    #38  

    Default

    Outsourcing jobs is a reality in today's global market. Wages is one of the most expensive cost of operating a business. One cannot just pick on a company like RIM without going through other companies that the consumers patronage. It's the balance of supply and demand. Ultimately as a consumer you have to decide what's morally acceptable and what's not. You cannot judge others without auditing your own entire consumption of products you used and owned. Chances are a very high percentage of those products were outsourced. Ideally, you want to bring the rest of the world living standard at par with the G9 countries, but we know that's not a possibility.
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  14. mapsonburt's Avatar
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    #39  

    Default

    You are right - and wrong. At this moment there are just under 300M in the middle class in India but in the next 10 years it is expected to grow to 547M (according toNational Council for Applied Economic Research's (NCAER) Centre for Macro Consumer Research. You are wrong in assuming it is personal income that defines the middle class - it isn't as Indians are very family oriented so it is household income which defines it. Everyone in the family benefits from a strong breadwinner. It is currently uses 'household income' as the criterion, a family with an annual income between Rs 3.4 lakh to Rs 17 lakh (at 2009-10 price levels). A lakh is 100,000 Rupees which is about $1800. The family income is then about $6K-$30K/yr in Canadian dollars. You can buy a lot with that amount of money in India... A new Tata car can be bought for $2K.
  15. mapsonburt's Avatar
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    #40  

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    Quote Originally Posted by Roo Zilla View Post
    500M Indians in the middle class? I don't think so. Their per capita nominal GDP is about $1400 with growth rates of 6% annually. Let's assume for a moment there's a billion people in India (there's more), and half the people make $0. That leaves 500M people making $2800. That's not middle class. India as a nation is ranked like 140th in the world in per capita GDP, far from middle class. There just aren't 500M middle class people in India, and about 30% of them live below the international poverty line. Yes it's true per capita income has tripled in the past 10 years in India, but they were so poor to start off with, it's just changes in degrees of poverty. India is like, by far the worst performing of the BRIC economies and one of the worst performers of South Asian economies.
    Roo, you are right - and wrong. I was a bit aggressive with the numbers as it was a while since I last looked them up. At the end of 2010-2011 there are just under 300M in the middle class in India but in the next 10 years it is expected to grow to 547M (according to National Council for Applied Economic Research's (NCAER) Centre for Macro Consumer Research. You are wrong in assuming it is personal income that defines the middle class - it isn't as Indians are very family oriented so it is household income which defines it. Everyone in the family benefits from a strong breadwinner. It is currently uses 'household income' as the criterion, a family with an annual income between Rs 3.4 lakh to Rs 17 lakh (at 2009-10 price levels). A lakh is 100,000 Rupees which is about $1800. The family income is then about $6K-$30K/yr in Canadian dollars. You can buy a lot with that amount of money in India... A new Tata car can be bought for $2K. Suffice it to say that 300M new Middle class citizens is a very large market and the FIRST possession they want to buy is a cellphone. It is a status symbol that you are doing well. RIM trading a few dozen back office financial jobs for a big chunk (the are currently #1 or #2 depending on the study) of the Indian market is a very good move. I'm not suggesting that the two are closely linked but if you stop outsourcing as many suggest, you also remove access to that market. You have to trade to play.
  16. richardat's Avatar
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    #41  

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    Quote Originally Posted by mapsonburt View Post
    You are right - and wrong. At this moment there are just under 300M in the middle class in India but in the next 10 years it is expected to grow to 547M (according toNational Council for Applied Economic Research's (NCAER) Centre for Macro Consumer Research. .
    NOPE. Roozilla was correct. You asserted that "nearly" 500 million had been put into the middle class. Roozilla correctly stated this was not the case. In fact, 300M is a high estimate, some estimates have been as low as FIFTY million, or ONE TENTH what you asserted. Note as well the 547M is a forecast from ONE source, and even in that forecast, that number was predicted for 2025/2026, which is closer to 15 years in the future, not 10. Even when you looked up numbers, you are not accurately reporting them.

    Just own up to the mistake, don't try to spin it into Roozilla was "right AND wrong".
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  17. lynxs_claw's Avatar
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    #42  

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    Quote Originally Posted by jenks5150 View Post
    That is a gargantuan and irresponsible if. Imagine a scenario where BB10 doesn't fan out and RIM fails. If the board sees that they did not follow through on their cost-cutting CORE program...what is an acceptable answer going to be? "Yeah we didn't totally finish it but...but we assumed that BB10 was going to sell millions and it wouldn't have been an issue!"

    That's not the way it works in the business world.



    How would RIM lose $50 Million in profits by outsourcing accounting jobs to lower-cost India? I don't follow you on that one. Lower costs for selling the same product = more profit.
    I totally agree.

    Let's assume that BB10 will be a success.. but not immediate. They need to watch every penny in order to ensure FULLY getting back into the game. All future development products (BB10 "N-series", PB v2, PB 10", etc.) following BB10 'L-series' require investment funds which are acquired by RIM's profits. I'm an investor and Canadian.. but even I see that there is no choice for RIM at this stage. Once they're back on their feet again .. then discussions can recommence on whether outsourcing to lower cost countries is ethical or not.

    It's survival right now for RIM so they need to do whatever is required to prepare and protect themselves .. right now...
  18. Jonesy1966's Avatar
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    #43  

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    My 9700 was made in Mexico. Not sure where my 9900 and 9790 are made as I can't be bothered to look but I'm pretty sure they're not made in Canada either. Not sure, but I'm pretty convinced that is what you call out sourcing and RIM's been doing it for a while.

    If you're really that bothered by it, sell your stock. Problem solved.
  19. maxb1ack's Avatar
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    #44  

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    Quote Originally Posted by timmy t View Post
    As a shareholder in RIM, I was disappointed to learn that RIM is outsourcing its Canadian accounting jobs to India. I was hoping for more from Thorsten.
    As a shelholder I'm disappointed to learn that India buys more BlackBerrys then Canada. Most of Canadian market is shifting towards Android & iOS.
    #BB10devTeam
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  20. djdragon's Avatar
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    Quote Originally Posted by timmy t View Post
    I am an ethical investor
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  21. Roo Zilla's Avatar
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    #46  

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    Quote Originally Posted by mapsonburt View Post
    You are wrong in assuming it is personal income that defines the middle class - it isn't as Indians are very family oriented so it is household income which defines it. Everyone in the family benefits from a strong breadwinner. It is currently uses 'household income' as the criterion, a family with an annual income between Rs 3.4 lakh to Rs 17 lakh (at 2009-10 price levels). A lakh is 100,000 Rupees which is about $1800. The family income is then about $6K-$30K/yr in Canadian dollars.
    By this logic, a family of 4 making $7200 has the same disposable income as an individual making $7200. Of course that's not true. You can group people however you want, families, communes, towns, cities, provinces, but you can't escape per capita GDP. Group them into 4s, and they can buy a $2000 car. Group them into 1000 and they can buy a school. Group them into 100,000 and they can buy paved roads. Group them into 10,000,000 and they can buy mass transit and skyscrapers. The median individual however, is constrained by per capita GDP as to what he can buy. I think you're forgetting that as the group gets larger, the consumption also gets larger. Sure there are some economies of scale on certain things, like housing in some cases, but again, you can't escape per capita GDP, 4 people eat a lot more than 1 person. By your logic, there should be almost non-existent poverty. Certainly the vast majority of families of 4-6 are earning greater than the $1 per day poverty level. A family of 6 earning $0.25 each would no longer be considered to be in poverty according to your logic. Are you really willing to say poverty doesn't exist in India? This doesn't even take into account the huge income disparity in India, which will potentially become a major social issue in the coming decades.

    Perhaps the concept of PPP would explain what's going on a bit better. Purchasing power parity is more or less, the how much purchasing power one has in a different country. The standard PPP has been normalized to USD in most measurements. The PPP for India is about 2.6, meaning that $1 spent in India, is about equivalent to spending $2.60 in the US, thus $1400 in India is equivalent to about $3700 in the US. Basically, it means cost of living is cheaper by almost a third in India compared to the US. Even accounting for PPP of about $3700, the PPP for a family of 6 in India would be less than $24000. Would a family of 6 making $24000 a year be considered middle class in the US or Canada? I suggest they would quality for some type of aid.

    As Richardat noted, the estimates of the Indian middle class are all over, but for certain, it's not 500M, and 300M is more than likely a fantasy. I concede 50M might be a little low for a population of 1.2B and $1400 per capita GDP, but I suspect the true number is a fraction of 300M or 500M because as I explained earlier, there just isn't enough money to redistribute to get to 500M or even 300M. India is 140th in the world in per capita GDP, there's no getting around that fact.
  22. maam's Avatar
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    #47  

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    I hate to say this but in the end it's a business eh. Plus rim is in no situation to keep position in house, cutting a billion $ is no easy task eh. I just hope once rim get there feet off the ground they will bring back the positions back to Canada
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  23. Nickerz's Avatar
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    #48  

    Default RIM outsourcing Canadian jobs

    Wow! Talk about short sighted reasoning here. Those that feel this is a good thing, are only concerned about their pocket book TODAY but TOMORROW it will catch up to all of us. We are cutting our own throats! We're having to compete globally and we CAN'T.

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  24. Nindia's Avatar
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    An ethical investor? What does that even mean?

    So you want to invest in a company that goes bankrupt, but remains ethical?

    "There's a sucker born every minute..."
  25. karaya1's Avatar
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    Somebody needs to take some basic Micro and Macro courses.

    First i'd suggest reading "That Used to Be Us" to fully grasp globalization and what to expect in the future.

    Welcome to the world of high skilled, low wage labor. People across the U.S do not understand it either.
    To be middle class in the future, folks will need more advanced skills and educations than was required over the last few decades and do jobs that can't be done by someone who is willing to do it for less from a BRIC country.
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