While President Donald Trump promised to bring American jobs back to the U.S. on the campaign trail, many big U.S. companies continue to outsource jobs to countries like India. And the trend is even increasing. Outsourcing U.S. jobs hurts the local economies, but the companies say it helps cut costs and stay competitive.
Fashion retailer Ralph Lauren Corp (NYSE:RL) announced in the spring that it jettisoned 107 jobs in Kernersville, Greensboro, and High Point, North Carolina. The company did not say where the IT jobs were moved to. However, it has admitted that some of the eliminated jobs were outsourced to a third-party vendor that has offices all over the world, including India.
Ralph Lauren said the IT layoffs are part of an effort to, “return the company to sustainable, profitable growth.”
Brady Teague, a principal in charge of IT recruiting at the staffing firm TalentBridge in Charlotte said, “You can hire a programmer in Charlotte for $60,000 to 80,000 a year, or you go to India and get the same quality of service for $60 a month.”
Most recently, three U.S. IT workers allege that Ralph Lauren shipped their company’s IT jobs from Lyndhurst, New Jersey to India. While only three signed the petition, they believe that up to 100 IT jobs were outsourced to India.
In a petition to the Department of Labor, three laid off Ralph Lauren workers said their jobs were outsourced and sent to India because of free trade policies. They stated that their, “roles and assignments had been slowly but increasingly transferred to India.”
The three say their jobs were outsourced to reduce overhead and increase profits. Moreover, tasks previously given to American workers were transferred to consulting companies offshore to save on taxes (Social Security, Medicare, and State Unemployment), as well as insurance (health care and basic life) and labor costs.
Typically, employees who work in the manufacturing industry file petitions to the Department of Labor asking to be eligible for retraining programs after their jobs have been outsourced. But this petition by former Ralph Lauren employees shows it’s not just manufacturing companies looking to save costs by outsourcing American jobs.
In fact, according to a 2016 analysis by Deloitte Consulting LLP, “outsourcing is not only alive and well, but it is growing.”
According to the most recent data, over the last 20 years, the number of Americans working for U.S. fashion manufacturers has been decimated, plunging by more than 80%, from 900,000 jobs in 1990 to around 150,000 in 2011.
Because of the massive layoffs that have occurred over the last couple of years in the retail industry, that number will be significantly lower. For its part, Ralph Lauren announced it is closing 50 stores, including its flagship Fifth Avenue store in New York City, and was laying off eight percent of its staff.
“WARN Notice – Summary Count,” North Carolina Department of Commerce, last accessed June 19, 2017.
“Despite Trump’s criticism, companies in Charlotte are sending more jobs overseas,”The Charlotte Observer, June 19, 2017.
“Petition for Trade Adjustment Assistance (TAA),” U.S. Department of Labor, May 31, 2017.
“Employment in apparel manufacturing and component industries, 1990-2011,” U.S. Bureau of Labor Statistics, last accessed June 19, 2017.
“Ralph Lauren closing Fifth Avenue store,” CNN, April 4, 2017.