Most of the focus on ‘saving’ airline jobs has been on union jobs like pilots, mechanics, and flight attendants. But airlines are downsizing non-union roles, too. They can’t legally terminate even non-union employees until October 1 because they took CARES Act payroll grants, but they’ve told people who will lose their job as soon as the restriction ends and they’ve gotten people to leave ‘voluntarily’ by offering them a slightly better deal to exit early.
United Airlines even forced non-union employees to take unpaid vacation because their lawyers figured out that didn’t run afoul of technical restrictions in the CARES Act: they could not reduce rates of pay, but the law didn’t prevent them from reducing the amount of work they’re paid for.
Like American, United set a goal of reducing management head count by 30%.
Yet as reported by Jon NYC, United Airlines is actually hiring – just in Gurgaon, India. And they aren’t offshoring the way you normally expect, looking for cheap coders or call center employees. They’re hiring for more analytical, and traditionally white collar, positions. This includes Senior Analyst, Manager, and Senior Manager roles including:
- Senior Analyst – Network Planning
- Senior Analyst – Revenue Strategy
- Senior Manager – Sales Programs
- Manager – Revenue Strategy
If you dig into the specific positions, United Airlines is clear – they will not consider a transfer of U.S. employees to India even if people are willing to do it.
This position is offered on local terms and conditions. Expatriate assignments and sponsorship for employment visas, even on a time-limited visa status, will not be awarded.
The move to shift management jobs to India at lower salaries is awkward after taking $4,958,498,096 in payroll support funds in order to ‘save U.S. jobs’ and lobbying for another $5 billion (“clean extension of the CARES Act”). However that’s not what I’m most interested in here. It’s something far more fundamental and ambitious than that.
- United’s hiring of network planning and revenue strategy executives in India is, of course, great news for talent in India. And their lives count, too.
- If this works it’s also great news for U.S. firms, despite the best efforts of politicians talent is increasingly globalized. Wages will go up in India, investment returns go up in the United States.
- By keeping United Airlines afloat and competitive that will support jobs in the United States in maintenance, supply, and tourism. (My understanding of the literature is that the overall effect of offshoring on U.S. wages is mixed.)
What’s fascinating here is that United is offshoring managerial-type tasks, not just lower-skill tasks whether call centers or basic coding. That’s an experiment we may be able to learn a lot from – but isn’t guaranteed to work. It’s also a far cry from where the airline was just in March, reluctant to support remote work.
It comes at an especially uncomfortable time though, when they’re asking U.S. taxpayers to subsidize jobs they have no intention of keeping in the United States.
Disgraceful–taking US bailouts paid by US taxpayers, only to use that money to support a business hiring workers in a foreign country, who pay no taxes to the US government?
Where are the people who say to keep jobs in the US?
I don’t disagree with @KimmieA but if I were doing this I would be hiring in the Phillippines.. a completely different class of person, attitude, and English skills v India.
The need more CARES money to get the facility in India set up and get the people trained.
Seems like a good use of taxes.
Because their airlines do so well. . .bye bye United.
Woofie. I agree. Philippines or Singapore. Funny enough United could basically transfer their corporate office to the US Virgin Islands, Puerto Rico or I think, Guam, and get like 90% off their federal taxes.
I like how coding is noted as a low skill job. Meanwhile it’s one of the better paying jobs in the US.
Seems like United’s confident in the labor pool in India delivering for United. Hopefully it works out for United, but chalk this up as yet another example of why corporate bailouts by American taxpayers is of doubtful benefit for America.
I will note that there is an old adage about Indian labor: Indians outside of India work out in a way that Indians inside India do not. While this doesn’t hold as true as used to be the case, it’s still part of the productivity picture.
Interesting to see how this plays out. There’s a lot of subtleties and nuances when it comes to the difference between success and failure when using off shore resources.
Given that India is the identified country, would think this is being done after consult with US gov’t. representatives and their implicit approval. India, and especially an India with a right-wing nationalist government in many ways similar to our current administration, is an important counterweight in Asia to China, and no surprise that the US would see a private-company initiative like this as strategic, even at the expense of US jobs.
Seriously? They are going to outsource white collar jobs that we have americans available to do at a time when our economy is in chaos? They better not get any benefits from the US government if they are pulling this crap.
India’s Prime Minister Modi loves Trump, and Trump loves favorable attention. They are two birds of the same feather in a way, but Modi plays a long game in a way that Trump struggles with due to his attention span issue and his obsession with the US cable “news” channels’ stories of the day. So which of these two countries’ leaders is going to claim UA’s moving of these jobs as a win for their country? India’s gain at US employees’ expense.
Have they learned nothing from the nightmares of dealing with customer service in India???
This is ridiculous! United should chat with Air Canada about their lost baggage call centre in India to see how that’s worked out for them. AWFUL!
COVID19 –
If your working from Home – pretty sure you can be outsourced.
Sad realty.
COVIDs only speed up the corporate timeframe of reducing its largest hard cost center: labor, retirement, health care, benefits and employment related taxes.
Outsourcing can be incredibly expensive trying to save a buck.
Just ask Boeing.
“Boeing’s 737 Max Software Outsourced to $9-an-Hour Engineers” (Bloomberg article).
737-Max has been grounded 18 months
@Jack
This is why so many big tech companies want to import foreign workers with H1B visas. There are probably 100 million Indians who are adept at coding. Cost of living and life is completely different in India for the poor versus in the U.S. where most poor people have smart phones, tv, video game systems, hot water, and junk food. Of course there are many willing to accept low pay for coding work in India, and those obviously will be willing to work In the U.S. for cheaper than America citizens. It’s the reason why so many manufacturing jobs went to China, Mexico, and other countries like Vietnam. Coding jobs are not safe. Only language and cultural peculiarities prevent coding from being completely outsourced. That’s why unions are so problematic. Of course everyone should be fairly and well compensated but unions push companies over the edge with excessive wages and protections for bad workers that lead to outsourcing or bankruptcy.
Attacking ME3 for government subsidies and takeing away US jobs is put on hold, right? 🙂
Upper management in the Willis Tower should be watching their backs as they walk past analysts and low-level managers to get to their offices. They have no way of knowing who might stab them in the back and cause some blood to run.
Jackson Henderson,
Your attempt to blame unions for this kind of United move and outsourcing — or rather offshoring in the case of UA here — is cute but misplaced. Even many a job role and workplace with no unionized workforce of relevance to the job/site has managed to outsource and offshore to lower wage countries. If anything, American unions do a bit to slow down American employer’s cost-cutting measures from hitting American employees; and it is this (i.e., the unions’ dragging on cost-cuts hitting employees) that is in large part why the US Chamber of Commerce types are so often major haters of unionized workforces in the US and even elsewhere.
India doesn’t have 100 million Indians who are adept at coding, as the number is almost certainly far less than that; but there are more than 100 million smartphone users in India, most of whom have China to thank for their devices.
A highly unionized workforce is not the end of the world. In capitalistic Sweden, the proportion of the labor force that is unionized is c. 2/3 of all employees, and yet Sweden is a very successful economic player. A Swedish business owner in Sweden would see a higher, post-tax-adjusted return on their capital investment than an American business owner in Sweden or the US would see on the very same capital investment yielding any substantial profit. And this comes with a society in Sweden that has less extreme problems than the US, problems that do ultimately cost business owners too.
Bread and circuses for the masses have their limits. Longer term economic returns may be higher and more sustainable when the forces of social and economic stability are stronger and business owners aren’t counting on bread and circuses to work.
United’s bookings are down 90% with no recovery in sight and the company just struggling to survive, and you expect them to keep paying white collar workers US wages ? Thankfully for United internet keyboard warriors don’t run their company
GUWoner!!,
Very well put. I could write About this for days but I’m just a lowly Union member sitting around doing nothing but collecting a huge pay check and ripping off the American tax payer. I know the article is about a change in management philosophy but any time this happens it also affects everyone down-the-line. Funny how so many non Union people see things that way. In my 25 years+ in the airline industry as a technician , a supervisor and middle MGMT, I have been through literally thousands of hours of training and OJT with our senior technicians and continue to learn every day to help keep you and your family safe while you’re at 36000′. I have gotten up in the middle of the night several times over the years, driven back to the airport because of a concern of a particular item that may have needed to be double checked or triple checked. I’m hard working , conscientious and safety informed. I have come to know hundreds of technicians that are exactly like me. What I have learned over my 25+ years is that the people that are not like me are the management representatives who push to skip some of the basic rules…..for some reason or another.( time/schedule/revenue) When you look at overall numbers most of the big companies are MGMT heavy. Just my 2 cents. We have been here before and guess what? A couple years goes by and it always comes back. It’s not as cheap or cost efficient as your senior leaders think. There is no substitute for knowledge and quality when it comes to 36000′ but hey who am I, good luck with that.
What a disgraceful Airline. I don’t blame the Indian people they work hard and offer value for the dollar. But an Airline which makes 70% of its profit from US origination traffic still has no loyalty to the American people. That said neither does Apple. So accept it we must and suffer.
Budster buddy, Your work is highly valued but I’m sure in that role, even technicians in India are working with that sincerity. They have some really decent airlines of their own. That said, fact remains that unions are kind of a necessary evil but not in maintenance jobs. There is no way your maintenance job is getting outsourced to another country.
The jobs that seemed to be getting outsourced are the ones which can be done sitting at home. You can’t fly a plane, service a plane or maintain a plane with outsourced labor but you can certainly plan and run operations remotely. So I’m not surprised that during such difficult times for airlines they’re looking at all possible avenues to stay afloat.
Remember the old adage, “Buy American”? Why do anything with UA until they hire American. I will never set foot inside their planes for points or cash. UA has earned the scourge of the American people.
United has had bad customer relations (remember untied.com) and not too healthy employee relations. I hope the employees find a way to fight this, if only to cost time and money. The action of UAL management is indicative of their own lack of creativity and laziness while still taking a paycheck. United has crossed line the traveling public should hold them accountable.
“You’ve been Kirbyed!!!”
@AP.
Post COVID think anything is up for grabs.
NAIA (MNL) airport performs C and D checks on Airbus A319/20~A380 for BA, PAL, LH, LX, CX, AF, as well as another 20 or so foreign airlines. They also service 747-400/777.
AA’s Union contract for mechanics – a huge issue is/was any future outsourcing of
AA maintenance/overhauls to IIRC So. America Hubs/partners.
Clark Airbase ( Now Int’l airport). North of Manila 60-90 miles Would be an ideal site for a Boeing focused deep maintenance center for wide bodies.
LUV (WN) contract with maintenance union had dragged out but was settled and accepted in 2019 – but LUV only has to maintain 737 – which does simplify repairs maintenance.
This is a bad move by united airlines,misusing the relief package money. Why they can not give these jobs to neighboring countries like Virgin island,west indies who are very poor, or unemployed US citizens?or at least consider Philippines who are far better in work ethics than Indias techies.
I live in a United hub and have flown mostly United for the last 12 years. I find this kind of outsourcing to be unacceptable, especially if it is being paid for by US government bailout dollars.