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US firms outsourcing to India

 
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Originally posted by Mark Fletcher:
Hi,
If I may, my rather ill informed 2 cents on the matter
I think the outsourcing of skilled labour from richer countries such as the US to poorer countries such as India (sorry no offence meant to our Indian friends) is a natural progression of a maturing industry. If the same task can be carried out for far cheaper than native labour, without a noticable change in quality, then it will happen. And I think this has already been happening for a while.
The question I feel has to be asked is "How much of company X's IT can be outsourced?" Its clear that the answer is not "Everything!". Go to Wipro's site and check out their presentation on Outsourcing.
I feel that there is a definite benefit to outsourcing ie lower costs, but this is offset by risk. Not everything is suited to outsourcing, as is clear in Wipro's presentation.
I fear that in the current economic climate, with CEO's and CTO's doing everything they can to reduce costs in the short-term, they may be outsourcing too much, and this will come back and bite them at a later date.
With regards to the US's current IT Job market woes, its clear that there is definitely the case where the supply of skilled labour at the right price, outweighs the demand for said labour. In this case, I would propose the following:
1) That the US government severly curtails or eliminates completely the ability for companies and to apply for IT workers under the H1-B program. I know Im going to get crucified for this and some may brand me a racist, but again I point you to the simple economic fact that there is currently an oversupply of IT labour. Otherwise why would places like Silicon Valley suddenly have high unemployment?
Cheers, and hey Im donning that asbestos suit right now so flame on!
Mark


no flames here..
what we forget is we live in a world economy..those skills that can be comodized wil be imported overseas those kislls that are still unique in nature due to complexitiy and etc will stay in the US..
It would seem that US it workforce is still very storn in unique research skills in devloping cutting edge new applicaiotns with new technology..but adopting that requires a risk as well..
not any easy answers here and the water is still clear as mud..
 
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Originally posted by Fred Grott:

what we forget is we live in a world economy..those skills that can be comodized wil be imported overseas those kislls that are still unique in nature due to complexitiy and etc will stay in the US..
not any easy answers here and the water is still clear as mud..


Yes we live in a world economy and I belive that US tech developers are competitve.
Years ago I interviewed to write device drivers at a company that made tape drives. They had started as a software company, but then purchased an off-shore manufacturing plant for a tape drive that was formerly made in the US. They brought all the tooling back to the US and set up a small plant in San Diego. They were sucessful and made a competitive product that sold well.
I recently interviewed with a local company that outsourced about 30% of their development effort. They were looking for local developers to replace the offshore workers, despite the higher labor rates. The main problems were with communication and just the time lag between the home office and off shore developers.
 
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Originally posted by Mark Fletcher:
Hi,
1) That the US government severly curtails or eliminates completely the ability for companies and to apply for IT workers under the H1-B program. I know Im going to get crucified for this and some may brand me a racist, but again I point you to the simple economic fact that there is currently an oversupply of IT labour. Otherwise why would places like Silicon Valley suddenly have high unemployment?
Mark


Economic downturn has already taken care of this.Number of people going to US on H1B (mainly from India) has been drastically(almost nil) reduced.Bcos many corporations are finding outsourcing much cheaper than hiring H1Bs.Assuming starting salary of H1B is $60K/year,you can hire 10 equivalent people easily here.
Software(programming) has changed quite a lot in a last decade.You don't need geek type people in projects now a days at every stage Also basic groundwork has already been done.
 
Andrew Fischer
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Originally posted by rahul rege:

Economic downturn has already taken care of this....Assuming starting salary of H1B is $60K/year,you can hire 10 equivalent people easily here.


What is the standard of living for a Software Engineer in India? Sure you are only making US$10,000 a year, but some things cost less in India. I just checked, $1US = 48 Rupee.
Can a mid carreer programmer afford a house? Air Conditioning? TV/DVD/Nintendo. A good school for your children? Meals out at a nice restaraunt? Good clothes? A servant? (We can't afford a maid) Two cars?
I'm asking because we are in a global economy. At some point unemployed US citizens may start looking to India for work!
 
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Originally posted by Andrew Fischer:
I'm asking because we are in a global economy. At some point unemployed US citizens may start looking to India for work!


Most countries are more restrictive than the US about allowing foreigners to come in and work. Not that they never allow it, but it is generally tougher.
 
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Originally posted by Andrew Fischer:

What is the standard of living for a Software Engineer in India? Sure you are only making US$10,000 a year, but some things cost less in India. I just checked, $1US = 48 Rupee.


Can a mid carreer programmer afford a house? Yes. Rent for a nice 3 bedroom house would be $100 to $150 per month. (Varies from cities to cities widely)
Air Conditioning?
Not quite. But then, you don't really need it.
TV/DVD/Nintendo.
Yes.
A good school for your children?
Sure will have a difficult time choosing between so many good schools ? especially in cities!!
Meals out at a nice restaraunt?
7 nights a week if you wish. A good meal in a very good (not a 5* ) restaurant will cost you 3 to 5 USD per head.
Good clothes?
Western brands (like Levis for example) or designer cloths will cost you exactly the same in US or in India. But excellent quality casual/formal local brand would cost a tenth of brands like Levis.
A servant?
Yes. Definitely part-time if not full time maid. Their service should cost you between $50-100 per month. (Depends on the city again).
Two cars?
One may be. Cars are expensive in India. So is petrol. About $0.80 per litre!!
Well, I know you were being sarcastic, but I was trying to give you an idea of how things fit in for mid career programmer in India.
Average salary for an experienced programmer in major firms like Wipro, Infosys etc is around 500,000 Rupees (5 lacs) per annum, which works out close to $10000. After tax average take-home per month would be something like $750 to $1000 per month.
 
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Well,
Its not just It jobs that are being outsourced or will be outsourced but others too.
Altogether 3.3 million US jobs in the services sector and $136 billion in wages are expected to move offshore to countries like India, Russia, China and the Philippines by 2015 according to a recent report of research and consulting firm Forrester Research.
For details, goto http://www.zdnetindia.com/news/national/stories/366,70849.html

Piyush
 
Andrew Fischer
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Originally posted by Ashok Krishnan:


Well, I know you were being sarcastic, but I was trying to give you an idea of how things fit in for mid career programmer in India.
Average salary for an experienced programmer in major firms like Wipro, Infosys etc is around 500,000 Rupees (5 lacs) per annum, which works out close to $10000. After tax average take-home per month would be something like $750 to $1000 per month.



Perhaps a bit sarcastic, but I really wanted to know what kind of life a professional engineer has in India. I'm glad to hear that wages provide for a comfortable middle class life in many ways comprable to one in the US.
 
Piyush Daiya
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Originally posted by Ashok Krishnan:

[qb]Can a mid carreer programmer afford a house? Yes. Rent for a nice 3 bedroom house would be $100 to $150 per month. (Varies from cities to cities widely)

hmm, Ashok which cities are u talking about? I dont think so the above holds true for Mumbai and Bangalore.
Air Conditioning?
Not quite. But then, you don't really need it.
I would like to disagree on that too, we do need it now.
TV/DVD/Nintendo.
Yes.
This possible

A good school for your children?
Sure will have a difficult time choosing between so many good schools ? especially in cities!!
True about that somewhat.
Meals out at a nice restaraunt?
7 nights a week if you wish. A good meal in a very good (not a 5* ) restaurant will cost you 3 to 5 USD per head.
Very true.
Good clothes?
Western brands (like Levis for example) or designer cloths will cost you exactly the same in US or in India. But excellent quality casual/formal local brand would cost a tenth of brands like Levis.
Very true
A servant?
Yes. Definitely part-time if not full time maid. Their service should cost you between $50-100 per month. (Depends on the city again).
Very true
Two cars?
One may be. Cars are expensive in India. So is petrol. About $0.80 per litre!!
Yeah it is expensive
Well, I know you were being sarcastic, but I was trying to give you an idea of how things fit in for mid career programmer in India.
Average salary for an experienced programmer in major firms like Wipro, Infosys etc is around 500,000 Rupees (5 lacs) per annum, which works out close to $10000. After tax average take-home per month would be something like $750 to $1000 per month.[/QB]



True.

But, as Andrew pointed, what about lifestyle?
I would also like to know.

Piyush
 
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well you can have pretty good life if you want to work as a mid programmer in India..
u can have once or twice nightouts in a Week..can have fun in nightclubs or have some fun with buddies n a pub..
if you like to get involved in some kind of sports..you can choose from a big lot..
but wont able to find ice hockey or baseball..
India is a big country , if you are travel freak, plenty of places to look for.
if likes reading or watching TV/movies, there is no shortage, you can have novels/CDs(all English) very cheap and with a huge variety..
Wont be facing any problem in conversation to local people as maximum people can speak English.
Plenty of food, cheap.
India is a safe country, what you may be hearing from outside, the reality is not at all like that, ya we do we have some troubled region in Kashmir, but in rest of India, you wont find any problem.
And we any of American/European is going to work in India, the guy is not going to work on local pay, he/she will get expat's package, then the person can have a lifestyle which can get in his/her own country.
[ November 21, 2002: Message edited by: Ash Chopra ]
 
Pradip Bhat
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Originally posted by Andrew Fischer:


....but I really wanted to know what kind of life a professional engineer has in India. I'm glad to hear that wages provide for a comfortable middle class life in many ways comprable to one in the US.


Although Ash/Ashok/Piyush are somewhat right,its not for every engineer/programmer' capacity to get as 'comfortable' life similar in US/Canada.Had it not been true, you would have seen many people migrating to India but its not the case.
First ,there is no consistancy in salaries offered to people by corporations.Bcos there is no concept of minimum wage.Company X in Bangalore might offer you salary of Rs 30,000 p/m,where as company Y might only give you Rs.15,000 p/m,thats 50% reduction for the same skills.
Second,Age discrimination.You might see the Ad in newspaper saying "Wanted - C++ programmers with 3-5 years experience,Maximum age - 28, should be from 'top notch' engineering college with consistent 3+ GPA" (Many 'Global' Fortune 500 players are no exceptions to this)
About engineering profession: Salaries of Mech/Civil/Electrical engineers are not as 'comparable' with CS/Software people.So you might not get same 'comfort' if you are mech/civil/electrical(not electronics) engineer.Also unemployment is a major problem for these professions.
Salaries of CS/Software people have defenitely risen in the past few years as said by above people
[ November 21, 2002: Message edited by: rahul rege ]
 
Ashok Mash
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I agree with Rahul here. Nearly 1000 applicants for every advertised vacancy; Of this 1000, at least 200 will be over-qualified for the job stated; still ready to do it for lower wages. Its tough.
Ashok.
PS: Piyush, I agree, I could be wrong. I did rent a 3 bedroom flat for 5K in Madras in 2001, but rents have gone a lot recently.
 
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Recession in the IT industry is global and not just in US and IMHO this is not due to outsourcing. 2 days back I visited recruiters in Delhi in India. I am exploring job opportunities in Delhi so that I can move back to India for personal reasons. I have 6 years of experience in the IT industry in Canada and graduated from an A grade engineering college in India. However the recruiters showed no interest in my resume. I was bluntly told that IT job market is down. May be my salary expectations of Rs. 30000 per month put them off, although I do have friends employed whose salaries are in that range. Indian students are not taking Computer Science branch anymore and there is a clearly a preference for more traditional professions such as government jobs, teaching, lawyers, MBA and even sales and so on. It is funny that IT professionals in North India are very much devalued in the Arranged Marriage arena as well. The layoffs in US of the IT people have been highly publicized in India just like their dollar power was once revered in the good old days. The party is over and the hangover is bad.
 
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Amitabh,
Have you worked in IT industry North India before? I think there are only a handful of IT companies in North India. If you choose to expand your search to Pune/Bangalore it might be a little easier to find work. While you are at it can you post your job search experience?
Thanks
 
Fred Grott
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Originally posted by Amitabh Sharma:
Recession in the IT industry is global and not just in US and IMHO this is not due to outsourcing. 2 days back I visited recruiters in Delhi in India. I am exploring job opportunities in Delhi so that I can move back to India for personal reasons. I have 6 years of experience in the IT industry in Canada and graduated from an A grade engineering college in India. However the recruiters showed no interest in my resume. I was bluntly told that IT job market is down. May be my salary expectations of Rs. 30000 per month put them off, although I do have friends employed whose salaries are in that range. Indian students are not taking Computer Science branch anymore and there is a clearly a preference for more traditional professions such as government jobs, teaching, lawyers, MBA and even sales and so on. It is funny that IT professionals in North India are very much devalued in the Arranged Marriage arena as well. The layoffs in US of the IT people have been highly publicized in India just like their dollar power was once revered in the good old days. The party is over and the hangover is bad.


I am curious about something..If I may ask..
Is that just in those positons where the job title is clearly IT or programming related?
The reason I ask is that many jobs here in the US that require it or programming skills no longer have an it or programming title and arelisted in other areas such as mangment, hr, and etc.
Do you see a similar trend in India?
 
Amitabh Sharma
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Hardeep, No I havent tried my hand at Bangalore or other places in South India so far for the lack of time and energy.
Fred,
Yes all of Project Management positions in IT companies list programming (tech) stuff in requirements. My brother who is sales manager for Pepsi in India knows (and sometimes uses in his job) quite a few things about computers hardware and software.
 
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I don't think you are being racist, Mark. Everyone in US is burned out right now, even the immigrants that have settled here in US. It has nothing to do with race. It's just that companies are in business to make money, not to lookout for individuals. We live in a capitalistic society, I am sure we will find a way to make ends meet if IT jobs are not going to feed our families.
 
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First of all, I am an Indian. Second of all, I think we should stop all these H1B people, because I have been living in NA since teenage and would like to have a decent job for myself.
Reading all the replies from above, it does not seem to be very optimistic. Now that there is an excess of IT workers, why don't they stop the H1B crap for sometime?
I have a college diploma and have been struggling to get a programming/testng job for a while to no avail.
[post edited for content by moderator]
[ December 29, 2002: Message edited by: Raj Gill ]
[ December 29, 2002: Message edited by: Mark Herschberg ]
 
Pradip Bhat
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H1-B visas must have almost stopped as discussed earlier.Otherwise you wouldn't have seen outsourcing to countries like Russia/India/China.
Anyway Happy New Year,exactly 11.5 hours remaining.
 
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Originally posted by Thomas Paul :
I would not recommend this field to anyone.


This is, certainly, the parent's profession syndrome. My parents used to tell me the same about their profession. And, as I know, all the parents do the same about all kind of professions in the world.
.

Originally posted by George Steiner :
I have a young son and I worry about my future and whether I will be able to provide for him in the future if I stay in this field.


I am afraid your son will be young to you for good.
Advise him some inter-disciplinary field, pref. connected with manufacturing existed 200 years ago
For sure it will not disappear for the next 200 years. For ex., I entered to very fashionable, at the time, Nuclear Chemistry but very fast changed profile to the major without collateral military/emergencies obligations of Chemical Cybernetics.
I worked with all possible to imagine engineering fields inside just a single project, before I came to IT. And I haven't the smallest doubt that I may always come back and there is no overcrowd there. I have no doubt that no CS major will occupy vacancies awaiting me.

Originally posted by Barry Gaunt :
I've got one of my sons at school doing a commerce and informatics combination.


You've got the idea.

Originally posted by Thomas Paul :
As the number of IT programming jobs contract, the current field of programmers will be fighting over the few jobs left that Mark described.


Not me. I shall defect back to my previous occupations. Easy come, easy go.

Originally posted by Michael Bronshteyn::
If the pool of programmers is going to shrink, and new students will pick other fields other than programming, why do you think being a programming language instructor is a safe job.


Because all students now study computers and programming, not only CS majors. I just do not believe seeing this argument.
During WW2 most college professors were freed from mandatory military enlisting (what had not happened to programmers), except extraordinary situations. But it is not the history lesson about WW2


Originally posted by Mark Fletcher:
Hi,
1) ... there is currently an oversupply of IT labour. Otherwise why would places like Silicon Valley suddenly have high unemployment?
Mark


Portugal is the poorest country in EU, having 5 less salary than in UK, 2 times less than in Spain (just 200 km). So portuguese IT specialists, having the direct access to job positions all over EU, just leak away. And all of a sudden an army of J2EE developers got unemployed.
[ January 03, 2003: Message edited by: G Vanin ]
 
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my understanding was people lived in spain and commute into portuagal because of the higher salaries in portugal wrt spain?
Simon
 
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G usually just makes stuff up. The two countries have almost identical per capita GDP's but Portugal has an unemployment rate of 4% while Spain has an unemploymnet rate of 14%. I doubt that may Portugese are running to Spain to get on the unemployment lines.
 
Guennadiy VANIN
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I was responding to the argument that unemployed in USA was created by influx of emmigrants and had given an example that with outflux of IT specialists,like in Portugal, created the same problem. So, it is not valid
 
Guennadiy VANIN
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[quote ] Originally posted by Thomas Paul:
G usually just makes stuff up. The two countries have almost identical per capita GDP's but Portugal has an unemployment rate of 4% while Spain has an unemployment rate of 14%. I doubt that may Portuguese are running to Spain to get on the unemployment lines.
[/quote ]
GDPs per capita differ 2 times. I am not sure about GDP per capita. But I am sure that productivity in Spain is bigger 2 times and average salary is bigger by 80%.
Unemployment rate of cited 4% is 15 months old. Now it is about twice and still estimates are behind the actual state of affairs (the mechanism of producing of digit is that statistics is made up with a delay of 3-4 months). Unemployment has different structure and hits different layers of qualifications between countries. The more country developed the less it has qualified specialists unemployed. In Portugal unemployment hits first of all qualified and/or well-paid specialists.
It is easily understandable, Portugal has econ0mic model of extensive, contrary to intensive, development. Development does not extend it due to intensification but due to employment of more unqualified people. Engineers, university graduates from Eastern Europe work at Civil Construction. It is called the economy of concrete/cement development
OK, if Spain is not convincing, they may go to France or UK where they earn 5 times of that in Portugal. There is a leak of qualified people and all of sudden an army of J2EE developers unemployed.
 
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Originally posted by G Vanin:
[quote ] Originally posted by Thomas Paul:
G usually just makes stuff up. The two countries have almost identical per capita GDP's but Portugal has an unemployment rate of 4% while Spain has an unemployment rate of 14%. I doubt that may Portuguese are running to Spain to get on the unemployment lines.
[/quote ]
GDPs per capita differ 2 times. I am not sure about GDP per capita. But I am sure that productivity in Spain is bigger 2 times and average salary is bigger by 80%.


I'm voting for making stuff up, or at a minimum, gross exxageration. (All quotes and facts below are taken from the CIA World Fact Book 2002).

Portugal:
---------


Economic growth has been above the EU average for much of the past decade, but GDP per capita stands at just 75% of that of the leading EU economies.


GDP: $174.1 billion (2001 est.)
GDP growth rate: 1.7% (2001 est.)
GDP per capita: $17,300 (2001 est.)
Unemployment rate: 4.4% (2001 est.)
Spain:
------


Spain's mixed capitalist economy supports a GDP that on a per capita basis is 80% that of the four leading West European economies... Unemployment has been steadily falling under the AZNAR administration but remains the highest in the EU at 13%.


GDP: $757 billion (2001 est.)
GDP growth rate: 2.8% (2001 est.)
GDP per capita: $18,900 (2001 est.)
Unemployment rate: 13% (2001 est.)

--Mark
[ January 04, 2003: Message edited by: Mark Herschberg ]
 
Guennadiy VANIN
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Mark,
I based my arguments on the average salary levels. They are very loosely/unpredictably linked to GDP per capita. This is because salaries are the result of money division between workers. Meanwhile "capita" (in GDP) counts for only citizen (child, old, unemployed, invalid and is not foreigner), representative of native population.
Labor force may be 250% of population like in Kuwait (having 3-4 times more immigrant workers in labor force than native population) or less than 20%. Only this can make the 10-20 times difference for the same GDP per capita.
But there a plethora other factors: fluxes of capitals (in or out, how much. Half of GDP may just go out of country to foreign accounts), life expectancy,
Even in Lisbon, get a boat to the other side of the river (15 min.) and you have salaries 2-3 times lower for the same positions. Almost any country has concentration of capitals/banks/activity in capital and therefore higher salaries. And you argue about countries!.
I do not have so much time as you for searching digits.
But if to follow your logic (that GDP per capita represents average salary), then the average salary variation over Europe is just 25-50%, while it is almost 1000%.

This is just ridiculous how you manage inverting the obvious facts.
Anyway, I do not find any fun in citing digits out of context either.
I do not have so much time like you. I usually work with the screen and read side information for relaxing/getting asleep in paper form (newspapers, books, and magazines). I am pretty sure about what I have wrote since I have read it thousands times!
I usually do not jump to such conclusions and arguments even after providing proper arguments. Especially strange to experience it from moderators.
Please explain to ThomasPaul that systematic employment of such phrases like "USUALLY just makes stuff up", etc. "discussion fault". And that employment of such terminology is rude, inadmissible for sustainability of dialogue, especially from a moderator
 
Mark Herschberg
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Originally posted by yidanneuG ninaV:
Mark,
I based my arguments on the average salary levels.
...
I do not have so much time as you for searching digits.


Well, you can base your arguments on what whatever you like, most economists use GDP. In any case, I discount unsupported evidence.
My personal philosophy is if you're going to do smething do it right. I won't make an argument if I can't support it. I not expecting everyone to have every reference right away, but when someone can't support an argument when I asked, I start to question their numbers and reliability--that's just my personal opinion.


Please explain to ThomasPaul that systematic employment of such phrases like "USUALLY just makes stuff up", etc. "discussion fault". And that employment of such terminology is rude, inadmissible for sustainability of dialogue, especially from a moderator
See, if I were you, I would, instead of having written your last post, spent the time to find the numbers (it took me less then 5 min on Google to get mine) to prove thomas Paul wrong.

--Mark
 
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Guys,
can I suggest that by engaging in discussion with G Vanin or whatever he is called, you are only encouraging him to continue to attempt to rile/insult/anatagonise others on these boards.
I'm pretty fed up with his posts. (Oh and by the way, I am European and live in Europe)
How about no one ever replying to any post he makes ever again and hopefully he will go away?
And even if he creates a new id, it shouldn't be difficult to tell from his distinctive attitude and grammatical 'style'.
Raul
 
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Don't feed the trolls.
 
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I'm based in the UK and just wondered if anyone had seen a similar trend in the uk?
Thanks
 
Guennadiy VANIN
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Originally posted by raul enrique:

I'm pretty fed up with his posts. (Oh and by the way, I am European and live in Europe)
How about no one ever replying to any post he makes ever again and hopefully he will go away?
And even if he creates a new id, it shouldn't be difficult to tell from his distinctive attitude and grammatical 'style'.
Raul


I couldn't understand what is connection of the topic with the fact that Raul is from Europe?
G Vanin
 
Thomas Paul
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Originally posted by G:
I am pretty sure about what I have wrote since I have read it thousands times!

It doesn't matter how many times you read what you write, it still doesn't make it true.
:roll:
 
Guennadiy VANIN
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Originally posted by Thomas Paul:
It doesn't matter how many times you read what you write, it still doesn't make it true.
:roll:


I never had stated a once that what I read is true. You just miss the point
 
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Question...,
How many of you in this forum voted for George W. Bush?
 
Mark Herschberg
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Originally posted by Paul Bull:
Question...,
How many of you in this forum voted for George W. Bush?


Please don't hijack this thread. I generally let things run their course, but this is from left field, it is also not really appropriate to the forum. i recommend posting this question in Meaningless Drivel.
--Mark
 
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Hi Mark,
Sorry this also doesn't relate to this forum either I guess but I seriously wish this discussion doesn't let people go crazy hating many people on the earth.
(or may be I should not read these heated discussions)
I agree with whatever points people are bringing up considering situations they have faced and they are facing but I feel lot of 'rage' in what people write. I hope economy gets better to provide people enough living.
Thank you.
Maulin.
 
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Myth money is flowing out of USA??
Not true
1- Big dollars stay in USA with US CURRUPT CEO
2- The programmer in other countries suffer as
well becasue they companies in USA are
absuing them.
3- The programmers in USA suffer as well since
they may loose they jobs.
There should be a tap on the CEO who make the choices to move the development offices abroad.
not the out sourcing companies?? The are just trying to survive...like you and me
Its the corporate ppl like DELL - MICROSOFT and IBM who abuse poswer.
 
Mark Herschberg
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Originally posted by Sheeraz Khan:

1- Big dollars stay in USA with US CURRUPT CEO
2- The programmer in other countries suffer as
well becasue they companies in USA are
absuing them.


While you are welcome to hold whatever opinion you like, and post them here (within reason), I, personally, find such sweeping, baseless accusations in poor taste.

Originally posted by Sheeraz Khan:

There should be a tap on the CEO who make the choices to move the development offices abroad.
not the out sourcing companies?? The are just trying to survive...like you and me


There are certain tax implications for moving off-shore. Some good, some bad. If you think there should be more, you can always mention it to your representative in congress.

--Mark
 
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