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Labour migration law 'costs Sweden IT jobs'

TT/The Local/vt · 16 Nov 2010, 16:24

Published: 16 Nov 2010 16:24 GMT+01:00

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According to Swedish trade union Unionen, it's common for Ericsson and other IT companies to attract and train foreign workers in Sweden so they can perform similar tasks back in their home countries.

The practice will result in the disappearance of Swedish jobs, the union claimed.

The union alleges that two Ericsson departments are currently training a number of Indian workers. After the workers return to India, half of the employees in the departments in Sweden will lose their jobs when their positions are outsourced to India.

"To a certain extent, the foreign workers are used for that purpose," Tomas Svartling, collective wage agreement ombudsman for the IT industry at Unionen, told the TT news agency.

The permits are issued under 2008 reforms to Swedish laws governing labour migration which give companies more leeway in decisions about the issuance of Swedish work permits.

Unions have previously criticised the law for leading to abuses of low-skilled workers such as berry pickers and other agricultural workers.

But now labour groups are also attacking the law for the effect it may have on high-skilled jobs.

Ericsson is constantly moving its activities to other countries, often from Sweden to cheaper manufacturing countries such as India, said Unionen

"It is not about labour migration, but rather a visit to transfer skills," said Per Norlander, the chairman of the local chapter of the white collar Akademikerföreningen union at Ericsson in Linköping.

Ericsson has applied for work permits from the National Migration Board (Migrationsverket). According to its statistics, computer scientists and engineers are the second most common occupational group that receives work permits for Sweden, around 2,000, after berry pickers.

Story continues below…

Unionen was formed after the merger of HTF and Sif on January 1st, 2008, becoming Sweden's largest trade union representing private labour market and the world's largest white-collar union.

Attempts by The Local to reach Ericsson, Unionen and Akademikerförbundet on Tuesday for further comment were unsuccessful.

TT/The Local/vt (news@thelocal.se)

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Your comments about this article

18:32 November 16, 2010 by mojofat
If you can't compete against workers in India, then maybe the problem is your skill set and not the training of foreign workers. Maybe you should add more value than simply belonging to a union...just a thought.
20:00 November 16, 2010 by Freelife
I don't understand why the media always points at India when it comes to outsourcing. All our laptops, phone and other electronic goods are made in China using technologies from the US and Europe.

Similarly Volvo was not sold to an Indian company.

People don't outsource to India as a charity. Indians do work 12-16 hours a day for these companies.

India is a rich country with a lot poor people. It has a very corrupt government hence bad labor laws.
22:50 November 16, 2010 by thebittertruth
@thelocalnews.. So in the end waht do the Swedes want? People come here to work, they complain,...people work in their own country, far from Sweden but in Swedish owned companies, you still complain..You cant have it all. I think it is the spirit of GRAB GRAB GRAB that fuels the complaints by the Unions. I agree with @Mojofat who says you should add more value than simply belonging to a Union
09:23 November 17, 2010 by bocale1
@mojofat, do not be naive in your comment.

The problem is not the skillset, it is the labor cost (since I work in the IT industry as program and service manager I know what I am talking about).

Actually, I would say that normally when you staff a project, you consider always a decrease of productivity when bringing in offshore resources (indian, malaysian, chinese or anything else) compared to the onshore (swedish) people but normally this gap is overcompensated by the very low unit cost of these people.

And this is something that cannot be easily changed in Sweden, unless you can convince people to work year for 5000 sek a month or less (which is totally impossible).

Unions are only talking about a problem very well known by the people working in this sector.
09:29 November 17, 2010 by hogar2010
Comic, Union criticized the law instead to criticize (global) capitalism. You can call people to boycott some products of companies who transferred production to Asia but you can't complain about the law which is natural consequence of capitalism: running for profit. Beside it, such complains are without result, politicians are financed by riches and politicians will never limit possibilities for riches to make bigger profit.
10:04 November 17, 2010 by Fernandis
This is not against India or other country, but against corporates who want to earn billions with little contribution to the society where they originally emerged. What is ericsson without Sweden?? nothing it was Swedes who made it possible to compete internationally and established all the infrastructure. The problem is that "All companies outsource to INDIA not because of technology but due to Cheap labour" and in this way racism is growing against Indians all over the world. This is not the case for China since China is also invloved in manufacturing of high-tech roducts.
11:06 November 17, 2010 by Freelife

"in this way racism is growing against Indians" is what the problem.

Indians are not terrorists or communists. India is democratic country, and Indians work in their own country.

Specially in the US, a lot of stereotype has been built about the Indians. A lot of doctors in UK and US are Indians. Why cannot the UK and the US just send them to India? :D

If Ericsson or some other Swedish doesn't outsource to a country like India, they would have hard time competing with the US and Chinese telecom companies. Indian population explosion is going to make these things even worse in future.
13:52 November 17, 2010 by voidplay
Ericsson got a contract for $1.6 Billion as recently as a year ago for upgrading the networks in India. What many people do not know is that Ericsson also gets defence contracts worth several millions from India. But this may not be go on for much longer because as it is it is loosing out to its Chinese competitors Huawei. Ericsson is not doing a favor to India infact it is a late reaction. Ericsson mostly only had marketing and sales offices in India even though it had a monopoly in the market. Even today it keeps almost all its R&D work in Sweden, this is in contrast to Huawei which has large R&D operations in India.

I find it very amusing and disgusting that many uninformed Indians and Indian politicians are so pro-west when all they get is a raw deal and at the same time being suspicious of Chinese companies when they are in comparison fair.

Today the whole world is one country and there are no boundaries in trade. Of course this isn't entirely true, most trade laws are decided by the developed cartel.

The emerging economies however are getting a greater and greater leverage, which some have used well (China) and some have not (India).
17:06 November 17, 2010 by asian123
there are many countries where cheap labour is available.

when is comes to smartness and skill and cost india will be leading.

even in america and britan most high skilled jobs are held by indians like doctors

and NASA , GOOGLE , MICROSOFT 40 percent employs are indians .

american universities are filled with indians.

china is good for manufacturing. india is for services .because of their population.

india inherently very rich country and had capacity to buy anything in the world that is for sale with a lot of poor people.
17:57 November 17, 2010 by eddie123
the unions should quit whining. they just want to go back to the old system wherein they had the upper hand in deciding who gets employed and all not. 24 months back, companies in sweden offered very little in terms of foreign employment. today, that statistics is changing and all the unions can do is to complain to high heavens.

it is true that most foreign workers ain't joining these ridiculous unions - thus, their revenue sources are dwindling. the free market enterprise should have its way. it is silly to accuse ericsson of planning to ship jobs abroad. ericsson can decide unilaterally to ship its entire r&d department to india or china and the unions can do nothing about that.

the problem with sweden over the past 20 years has been that thousands of foreigners got educated at tax payers expense and were unceremoniously driven away. the UK, US and other countries rip the benefits of sweden educated graduates whereas the country lacked the gravitas to become more competitive on a global scale. the 2008 employment reform has opened the way to redress some of these anomalies.

if you educate folks, you should also give them a chance to work and contribute towards offsetting the cost of their education by way of taxation. obviously, the unions don't like this as they would rather have their coffee drinking tradition, unnecessary sick leave claims and needless gradualism on the job. damn the unions.
19:19 November 17, 2010 by skatty
I think it is possible to train Indian IT people and engineers somewhere else, if not in Sweden, and many electronic and IT jobs have already moved and will be moved.

I don't think the problem is the permission to Indian engineers in Sweden. Many companies employ Indian IT people and engineers because it is cheaper to outsource to India. The problem is the government in Sweden has no plan or any idea what it should do with its own engineers!

I mean in one hand Sweden has high unemployment in engineering section and in another hand let outsourcing without any particular plan for the homeland, and you see it is expensive to make good engineers without job in the country, even without considering how much it cost to educate them!

I don't get why anybody should be interested to study IT and engineering in Sweden at all.
22:19 November 17, 2010 by amelie_l
There is still lots of job opportunities in IT in Sweden compared to other branches, so it is definitely an area of study to recommand. Just check the category IT on Monster: http://jobb.monster.se/Browse.aspx

I believe that today to have a maximum chance to get a job, wherever in the world, you have to be either a seller or a technician.
18:29 November 21, 2010 by Baboune
In the multimedia unit of Ericsson, 70% of R&D is now in India/China. So any new investments are going towards those countries not Sweden.

The competition with India is not fair. The only directive within Ericsson is to "decrease hourly costs" not to decrease SW costs. The results of the current strategy are that: Ericsson products are selling less, costs of SW development are increasing, quality is going down significantly and innovation is dead.

In 7 words: Ericsson multimedia is running straight towards the wall.

To summarize: Contrarily to common knowledge, this large offshoring is NOT bringing any return on investment., and it is targeting highly skilled engineering work.

Are the unions right to question immigration laws? I do not think so. I would say that the Unions are wrong not to start moving towards decreasing costs of Engineering work: Increasing the number of worked hours for example, or by letting Ericsson freeze salaries, etc. Any measures that could decrease the hourly rates while maintaining jobs here for the future.

Should anyone go study IT? My answer is No unless you are passionate. Definitely not if you want to make money. At the current rate in 10 years SW Engineering will not exist anymore in Sweden within large companies.
17:21 December 4, 2010 by theahzoosaynah
give fair chance to a foreign workers, like IT skilled people.Let's be positive in results on method of training for foreign workers.
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