5 ms·

But that is not new. Tech always had overseas sweatshops. India, Latin America, Eastern Europe come to mind.

Amezarak 2y ago
It seems probable that the trend has accelerated.
ActionHank 2y ago
I think that businesses are emboldened now because they believe AI will bridge the gap that couldn't be bridge in the last great offshoring.
- torlok 2y ago
  What gap? People all around the world can speak English, and write code. The US didn't need AI to push all manufacturing to China. You're getting outsourced. This is normally where unions step in, but not in this country.
  - deadeye 2y ago
    It's a cycle. The US is expensive, so offshore. Offshore projects are more expensive because they never work, so come back to the US. I've lived it twice now. We’re in the middle of my third cycle.
    - almosthere 2y ago
      Expect this cycle to be perm. The infrastructure, education and language barriers are completely gone now. This is my third cycle too, and its different this time. In 2006 the Indians would randomly cut out, couldn't be on video (phone only) and had major language barriers, and they would join in their evening. Now in 2024 you're on their schedule. Believe me, those people are not staying up late for your 3pm call. Wake up at 5am every day to keep your job, you have 3-4 hours to work with them.
      - gedy 2y ago
        Honestly to biggest issues I've had with overseas devs and managers (mostly India) is the lying and misrepresenting which is cultural.
        whatever1 2y ago
        Honestly the biggest issue is time difference. If US corpos were strategic they would have invested in Latin America and build huge talent pools there. Same time zone, same culture same holidays, same language with big portion of the US population.
        deadeye 2y ago
        Last go around my client used Brazil. Worked for a while until there was a major system outage and it turned out they didn't have the skill set to actually solve any problems.
  - ActionHank 2y ago
    The gap between experience, domain knowledge, and legacy knowledge. If you've ever worked in a large org that has been running for a few years these can be significant gaps and they are usually filled by having access to someone in the office to answer questions.
    - gedy 2y ago
      Work ethic and trust culture are big ones as well. Though admittedly some leaders love the "yes boss" vibe of overseas devs, even if they are lying to your face.
  - listenallyall 2y ago
    You just pointed out all manufacturing migrated to China. Unions couldn't stop it (they probably accelerated it). So what would an IT union do?
- giantg2 2y ago
  What I'm seeing is that previous off shoring was mostly done with contract orgs. I'm seeing direct hiring this time. I guess for more control.
  - ActionHank 2y ago
    This will still fail I think, for the same reason contracting did. The churn is real and any offshoring hotbed ends up with a lot of competing between big companies for talent which then drives the prices up and motivates people to jump companies more.
    - giantg2 2y ago
      The issues we saw were more about quality. I know churn is bad for that, but I think the problem was more related to lack of oversight and vetting. This might improve that, but I'd probably bet against it.
almosthere 2y ago
This is true but it had not exploded at rates like this until 2022ish. Since 2000 the fed interest rate was effectively 0 until now. This is causing companies to cut every corner they can, which is causing no employment here, and 100% employment abroad.
- kasey_junk 2y ago
  https://www.macrotrends.net/2015/fed-funds-rate-historical-chart https://www.macrotrends.net/2015/fed-funds-rate-historical-c... Not true at all. We are in the same regime as the pre 2008 rate response. We are below the late 90s boom times. So you’d need some other explanation other than bare rates.
  - almosthere 2y ago
    Infrastructure for internet access, education in programming, and a lot of other things were NOT there in other countries in 2008-2012
- bigtimesink 2y ago
  The thing the WFH proponents didn't understand was that it showed management if you can do your job remotely, Andrzej can do it from Kraków.
  - gedy 2y ago
    I think WFH should stand for Where's Fucking Housing because that's like 90% of the "WFH crowd"'s motivation from what I've seen - since companies almost never pay enough to live near enough to their office. If they did, then the price differential between US and overseas would be even worse..
    - kridsdale1 2y ago
      /s You see, it’s of critical importance that Santa Clara valley retain the character of a quaint mid 1960s town of single level shops and tract houses. Where jimmy can ride his Big Wheel in the Cul De Sac.
alephnerd 2y ago
> Tech always had overseas sweatshops. India, Latin America, Eastern Europe come to mind But back then, the Engineering Manager or Product Manager would remain in the US. Now even Engineering and Product leadership is being outsourced as well, which makes it easier to enforce standards.
- lazide 2y ago
  How does it make it easier to enforce standards when everyone involved is able to collude easier?
- kasey_junk 2y ago
  That was not my experience, having worked through 2 other bust cycles, everyone said the same things through those as well.
  - alephnerd 2y ago
    As I mentioned in my comment, during previous boom-bust cycle, the leadership that had P/L responsibilities (Engineering Leadership, Group/Directors PM) would remain in the US. But after the COVID layoffs happened, impacted H1B, EB1/2, and O1 visa holders returned to their home countries, and then got rehired by the same employers but for $60k-130k TC (depending on country). A lot of mid-late career product and engineering leadership was laid of in 2020-21, and those guys have now founded the new generation of foreign offices.
phil21 2y ago
The difference is that they no longer are "outsourced" sweatshops. They are just entire divisions/departments of companies with full reporting chains. Effectively interchangeable with a US remote WFH employee/department. I've been employing eastern European IT folks since the early 00's as I've founded/worked for remote only companies since the late 90's. We were ahead of the game here, and anyone we hired was not treated like a sweatshop worker. They were hired and promoted like any hire we made in the US and were simply called an employee. The talent level was same or better than the US talent level for 1/10th of the cost, especially at the mid-tier/career level. The largest issue was timezones, but if you needed to staff a 24x7 highly skilled ops team - this was one effective way to get a great head start doing so. Plus it was relatively easy getting folks to work odd hours if you were paying double local salaries. Since the pandemic things have entirely shifted. It used to be large companies/enterprises would offshore to sweatshop style outsourcing companies. They had a hard time competing with us since the work and responsibility simply did not attract the best candidates. We could hire directly out of local university pipelines and be extremely picky in only taking the top 1% of candidates due to this. After the pandemic this totally changed to these large companies now competing on salary at levels we no longer found competitive. We simply no longer enjoy the strategic advantage of having an untapped low-cost highly skilled labor pool in these areas any longer. Large companies have more or less adopted our model. It's now not uncommon to have entire teams headed up by a highly competent senior VP or C level local leader who reports directly to US upper level management. They are included in all business decisions as anyone in the US would be at their level, and performance is similar to any US team. I have always (and even written a few times on HN about the subject) thought highly compensated US engineers were being exceedingly short-sighted in their demands for WFO since this was always going to be the outcome in the end. Once you can hire someone in the midwest US, it's not really a huge leap to realizing you can do the same 2500 miles away in a low cost country. There are still tons of labor arbitrage opportunities left in the world and the story that there is no local technical talent in these places is utterly false. It's always been a management problem. Over time it will even out - and it has quite a bit. Salaries are now maybe 1/3 to 1/2 US salaries at the same talent level, so it still has a long way to go in my opinion. You are only seeing the start of many companies building up long-term strategic plans in these regions - these things take years to decades to be fully realized. Most US WFH engineers will be competing on salary/skillsets in a world market within their lifetimes regardless of cost of living differences. The writing is on the wall, and I personally believe the die has been cast at this point.

It seems probable that the trend has accelerated.

I think that businesses are emboldened now because they believe AI will bridge the gap that couldn't be bridge in the last great offshoring.

torlok 2y ago
What gap? People all around the world can speak English, and write code. The US didn't need AI to push all manufacturing to China. You're getting outsourced. This is normally where unions step in, but not in this country.
- deadeye 2y ago
  It's a cycle. The US is expensive, so offshore. Offshore projects are more expensive because they never work, so come back to the US. I've lived it twice now. We’re in the middle of my third cycle.
  - almosthere 2y ago
    Expect this cycle to be perm. The infrastructure, education and language barriers are completely gone now. This is my third cycle too, and its different this time. In 2006 the Indians would randomly cut out, couldn't be on video (phone only) and had major language barriers, and they would join in their evening. Now in 2024 you're on their schedule. Believe me, those people are not staying up late for your 3pm call. Wake up at 5am every day to keep your job, you have 3-4 hours to work with them.
    - gedy 2y ago
      Honestly to biggest issues I've had with overseas devs and managers (mostly India) is the lying and misrepresenting which is cultural.
      - whatever1 2y ago
        Honestly the biggest issue is time difference. If US corpos were strategic they would have invested in Latin America and build huge talent pools there. Same time zone, same culture same holidays, same language with big portion of the US population.
        deadeye 2y ago
        Last go around my client used Brazil. Worked for a while until there was a major system outage and it turned out they didn't have the skill set to actually solve any problems.
- ActionHank 2y ago
  The gap between experience, domain knowledge, and legacy knowledge. If you've ever worked in a large org that has been running for a few years these can be significant gaps and they are usually filled by having access to someone in the office to answer questions.
  - gedy 2y ago
    Work ethic and trust culture are big ones as well. Though admittedly some leaders love the "yes boss" vibe of overseas devs, even if they are lying to your face.
- listenallyall 2y ago
  You just pointed out all manufacturing migrated to China. Unions couldn't stop it (they probably accelerated it). So what would an IT union do?
giantg2 2y ago
What I'm seeing is that previous off shoring was mostly done with contract orgs. I'm seeing direct hiring this time. I guess for more control.
- ActionHank 2y ago
  This will still fail I think, for the same reason contracting did. The churn is real and any offshoring hotbed ends up with a lot of competing between big companies for talent which then drives the prices up and motivates people to jump companies more.
  - giantg2 2y ago
    The issues we saw were more about quality. I know churn is bad for that, but I think the problem was more related to lack of oversight and vetting. This might improve that, but I'd probably bet against it.

almosthere 2y ago

This is true but it had not exploded at rates like this until 2022ish. Since 2000 the fed interest rate was effectively 0 until now. This is causing companies to cut every corner they can, which is causing no employment here, and 100% employment abroad.

kasey_junk 2y ago
https://www.macrotrends.net/2015/fed-funds-rate-historical-chart https://www.macrotrends.net/2015/fed-funds-rate-historical-c... Not true at all. We are in the same regime as the pre 2008 rate response. We are below the late 90s boom times. So you’d need some other explanation other than bare rates.
- almosthere 2y ago
  Infrastructure for internet access, education in programming, and a lot of other things were NOT there in other countries in 2008-2012
bigtimesink 2y ago
The thing the WFH proponents didn't understand was that it showed management if you can do your job remotely, Andrzej can do it from Kraków.
- gedy 2y ago
  I think WFH should stand for Where's Fucking Housing because that's like 90% of the "WFH crowd"'s motivation from what I've seen - since companies almost never pay enough to live near enough to their office. If they did, then the price differential between US and overseas would be even worse..
  - kridsdale1 2y ago
    /s You see, it’s of critical importance that Santa Clara valley retain the character of a quaint mid 1960s town of single level shops and tract houses. Where jimmy can ride his Big Wheel in the Cul De Sac.

alephnerd 2y ago

> Tech always had overseas sweatshops. India, Latin America, Eastern Europe come to mind But back then, the Engineering Manager or Product Manager would remain in the US. Now even Engineering and Product leadership is being outsourced as well, which makes it easier to enforce standards.

lazide 2y ago
How does it make it easier to enforce standards when everyone involved is able to collude easier?
kasey_junk 2y ago
That was not my experience, having worked through 2 other bust cycles, everyone said the same things through those as well.
- alephnerd 2y ago
  As I mentioned in my comment, during previous boom-bust cycle, the leadership that had P/L responsibilities (Engineering Leadership, Group/Directors PM) would remain in the US. But after the COVID layoffs happened, impacted H1B, EB1/2, and O1 visa holders returned to their home countries, and then got rehired by the same employers but for $60k-130k TC (depending on country). A lot of mid-late career product and engineering leadership was laid of in 2020-21, and those guys have now founded the new generation of foreign offices.

phil21 2y ago

The difference is that they no longer are "outsourced" sweatshops. They are just entire divisions/departments of companies with full reporting chains. Effectively interchangeable with a US remote WFH employee/department. I've been employing eastern European IT folks since the early 00's as I've founded/worked for remote only companies since the late 90's. We were ahead of the game here, and anyone we hired was not treated like a sweatshop worker. They were hired and promoted like any hire we made in the US and were simply called an employee. The talent level was same or better than the US talent level for 1/10th of the cost, especially at the mid-tier/career level. The largest issue was timezones, but if you needed to staff a 24x7 highly skilled ops team - this was one effective way to get a great head start doing so. Plus it was relatively easy getting folks to work odd hours if you were paying double local salaries. Since the pandemic things have entirely shifted. It used to be large companies/enterprises would offshore to sweatshop style outsourcing companies. They had a hard time competing with us since the work and responsibility simply did not attract the best candidates. We could hire directly out of local university pipelines and be extremely picky in only taking the top 1% of candidates due to this. After the pandemic this totally changed to these large companies now competing on salary at levels we no longer found competitive. We simply no longer enjoy the strategic advantage of having an untapped low-cost highly skilled labor pool in these areas any longer. Large companies have more or less adopted our model. It's now not uncommon to have entire teams headed up by a highly competent senior VP or C level local leader who reports directly to US upper level management. They are included in all business decisions as anyone in the US would be at their level, and performance is similar to any US team. I have always (and even written a few times on HN about the subject) thought highly compensated US engineers were being exceedingly short-sighted in their demands for WFO since this was always going to be the outcome in the end. Once you can hire someone in the midwest US, it's not really a huge leap to realizing you can do the same 2500 miles away in a low cost country. There are still tons of labor arbitrage opportunities left in the world and the story that there is no local technical talent in these places is utterly false. It's always been a management problem. Over time it will even out - and it has quite a bit. Salaries are now maybe 1/3 to 1/2 US salaries at the same talent level, so it still has a long way to go in my opinion. You are only seeing the start of many companies building up long-term strategic plans in these regions - these things take years to decades to be fully realized. Most US WFH engineers will be competing on salary/skillsets in a world market within their lifetimes regardless of cost of living differences. The writing is on the wall, and I personally believe the die has been cast at this point.