Outsourced: In A Twist, Some San Francisco IT Jobs Are Moving To India

Originally published on December 28, 2016 6:35 am

In San Francisco, companies will pay six-figure salaries to entry-level tech workers from all over the world. So this might come as a surprise: A public university there is laying off some of its own IT staff and sending their jobs to a contractor with headquarters in India.

Until recently, Hank Nguyen's daughter wanted to follow in his footsteps and work in tech. Last spring, she was accepted into the University of California system.

"She was inclined to take computer science and engineering," Nguyen says.

But then the letters started arriving. The first was a hefty tuition bill. At about the same time, Nguyen got a layoff notice.

His employer, the University of California San Francisco, or UCSF, was outsourcing his job. Nguyen was stunned.

How would he pay for his daughter's education? Would there be tech jobs for her when she graduates?

"I'm unsure about everything now," Nguyen says. "And she's unsure as well."

Nguyen came to the U.S. from Vietnam. He thought tech would provide a stable, middle class life. So he learned how to do backend IT work, to handle servers and keep networks running.

Now, Nguyen and several dozen others at UCSF are training their replacements.

"I'm speechless," Nguyen says. "How can they do this to us?"

UCSF has 565 full-time workers focused on core IT services. It is cutting nearly 100 IT jobs, full-time workers, contractors and unfilled positions.

UCSF spokeswoman Barbara French says the university can save $30 million over five years by outsourcing the work, "looking at what everybody else we're competing against is doing."

The school is also a hospital, and many hospitals have already outsourced lots of IT. French says UCSF provides around $130 million in charity care for the poor. To continue doing that, she says, the school has to focus on more specialized tech work related to patients and research.

"That belongs to us, and we need to be on top of it and grow it," French says.

This strategy might be good for the bottom line, but it means fewer American jobs, says Ron Hira, a professor of public policy at Howard University. The kind of back-end IT work UCSF is outsourcing accounts for the bulk of computer jobs, says Hira — way more than programming at Google or Facebook, for example.

"This is the bread-and-butter of the computer industry," he says. "This is going to be in every type of organization all across the country."

Hira says that nationally much of the work has already been shipped overseas. What's really scary, he says, is that it's hard to know how many IT jobs America has lost. Hira says the government doesn't track it. To get an idea, he gathers numbers on IT workers abroad. He estimates as many as 1.5 million foreign workers are now doing IT jobs for American companies.

"It's a silent destruction of really important innovation, high-wage — really the knowledge-based economy jobs that we're supposed to be moving into," Hira says.

Many of the jobs are being outsourced through multinational contractors. UCSF is working with a company called HCL. The contract covers all 10 University of California schools and that means it could potentially endanger thousands of IT jobs.

These contractors use H1-B visas to send a few foreign workers into U.S. companies. They learn how the IT systems operate and then ship the work to large teams abroad, where labor is cheap — cheaper to hire than Hank Nguyen. He has done this kind of work for 30 years.

"I try my best to have my American dream," he says. Nguyen can't understand why a public university system that trains the tech workers of tomorrow would lay off the tech workers of today.

"Many, many kids nowadays, younger like my daughter, [are] looking into that field, but they feel uncertain," he says.

Nguyen will be out of a job at the end of February. And right now, he's looking for some way to pay for his daughter's education.

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ROBERT SIEGEL, HOST:

In San Francisco, companies will pay six-figure salaries to entry-level tech workers from all over the world. But now one public university there is laying off some of its own IT staff and sending their jobs to a contractor headquartered in India. And, as Sam Harnett of member station KQED reports, many of the public universities across the state could follow its lead.

SAM HARNETT, BYLINE: Until recently, Hank Nguyen's daughter wanted to follow in his footsteps and work in tech. Last spring, she was accepted into the University of California system.

HANK NGUYEN: She was inclined to take computer science and engineering.

HARNETT: But then the letters started arriving. The first was a hefty tuition bill.

NGUYEN: About the same time, I get a layoff notice.

HARNETT: Nguyen's employer, University of California, San Francisco, or UCSF, was outsourcing his job. Nguyen was stunned. How would he pay for his daughter's education? Would there be tech jobs for her when she graduates?

NGUYEN: I'm unsure about everything now. And she's unsure, as well.

HARNETT: Nguyen came to America from Vietnam. He thought tech would provide a stable, middle-class life. So he learned how to do back-end IT work to handle servers and keep networks running. Now Nguyen and several dozen others at UCSF are training their replacements.

NGUYEN: I'm speechless. How can they do this to us?

BARBARA FRENCH: We can save $30 million over five years by outsourcing this, looking at what everybody else we're competing against is doing.

HARNETT: That's UCSF spokeswoman Barbara French. The school is also a hospital. And many hospitals have already outsourced lots of IT. French says UCSF provides around $130 million in charity care for the poor. To continue doing that, she says, the school has to focus on more specialized tech work, things related to patients and research.

FRENCH: That belongs to us. And we need to be on top of it and grow it.

HARNETT: This strategy might be good for the bottom line. But it means fewer American jobs, says Ron Hira, a professor of public policy at Howard University. Hira says the kind of back-end IT work UCSF is outsourcing accounts for a bulk of all computer jobs - way more than, say, programming at Google or Facebook.

RON HIRA: This is the bread and butter of the computer industry. This is going to be in every type of organization all across the country.

HARNETT: Yet Hira says, nationally, much of the work has already been shipped overseas. And what's really scary, he says, is that we still don't know how many IT jobs America has lost. Hira says the government doesn't track it. So to get an idea, he gathers numbers on IT workers abroad. He estimates as many as 1.5 million foreign workers are now doing IT jobs for American companies.

HIRA: It's a silent destruction of really important innovation, high wage, really, the knowledge-based economy jobs that we're supposed to be moving into.

HARNETT: Many of the jobs are being outsourced through multinational contractors. UCSF is working with a company called HCL. The contract covers all 10 University of California schools. And that means it could potentially endanger thousands of IT jobs. These contractors use H-1B visas to send a few foreign workers into U.S. companies. They learn how the IT systems operate and then ship the work to large teams abroad, where labor is cheap - cheaper than Hank Nguyen. He's done this kind of work for 30 years.

NGUYEN: I try my best to have my American dream.

HARNETT: Nguyen can't understand why a public-university system that trains the tech workers of tomorrow would lay off the tech workers of today.

NGUYEN: Many, many kids nowadays - younger, like my daughter - looking into that field - they feel uncertain.

HARNETT: Nguyen will be out of a job at the end of February. Right now he's just looking for some way to pay for his daughter's education. For NPR News, I'm Sam Harnett in San Francisco. Transcript provided by NPR, Copyright NPR.