“The company that redefined the way we listen to music has decided to call it quits in India. Apple, known for its popular iPods, is pulling out its software development and support operations in India,” R Raghavendra reports for the Times of India. “The company had commenced operations in April and hired about 30 people for its subsidiary, Apple Services India Pvt Ltd.”
“At a meeting on May 29, Apple announced its decision to lay off all its employees. Apple officials told them that ‘the company is revaluating its operations and has thought of pulling back its Indian operations.’ Apple is giving these employees a severance package of two months salary. It will settle all claims on June 9. When contacted, Steve Dowling, an Apple spokesperson, said, ‘We have re-evaluated our plans and have decided to put our planned support centre growth in other countries.'” Raghavendra reports.
Full article here.
[Thanks to MacDailyNews Reader “matt” for the heads up.]
“According to a sacked employee, the company had told them that its operations would now head back to the US,” CyberMedia News reports.
Full article here.
[Thanks to MacDailyNews Reader “m.” for the heads up.]
[UPDATE: 9:30am EDT: Added CyberMedia News report info.]
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Interesting that it doesn’t say anything about bringing this back to the US. They are probably going to pick a different country. It wouldn’t surprise me. I have some experience with offshoring and the cost savings are simply too big to ignore.
I do hope that they continue US based support
Nice going, Steve. Nice guy.
Hope that includes support phone calls. Leave that to microshaft and dull. Ever place a tech support call to either of those two?? What a nighmare / horror show talking to tech support in india. Good move Apple.
Everyone is getting this wrong. Apple may be stopping their OWN plans, but Apple will still employ and increase their contract with Transworks in Bangalore. Indian tech support will still go on, but as contractors, not as Apple employees in India.
they are going to put it in France…
I live in the US, and have gotten PowerBook support from Canada (Toronto area) earlier this year.
For waht that’s worth.
I live in the US, and have gotten PowerBook support from Canada (Toronto area) earlier this year.
For what that’s worth.
Apple managers told the terminated workers that they were pulling the support function back to the U.S. As far as the Indian workers, seems to me Apple is being quite generous providing TWO months severance for workers barely employed for just ONE month. This was probably a costly mistake, but Apple must have figured it would become even costlier (in either money or impact on quality) to stay in India. If Indian workers could have performed this function cheaper but at similar quality, they should have stayed in India.
The company I temp for moved a lot of it’s HR functions (i.e. paperwork processing) over to India within the last six months. Things that I could do before in five minutes now take five hours because they don’t know how to do things yet and have to ask me tons of questions. I totally see the cost savings in that!
Magic Word – says as in “The company says this is a benefit!”
My company (super-mega-corp) is seeing little benefit from sending positions to India regardless of the fact a large percentage of our IT people are Indian.
The problem is that India is India, not corporate headquarters. There’s too much separation in business practices and culture. I can only speak from experience, but the support roles we send over there are still supported over here, except now we have to train those people as well. Due to support structure decisions for cost-cutting reasons, the technicians doing support are not at all familiar with the systems they are supporting. They can us in the US for help.
What’s the point? There’s probably many reasons to have outsourcing to India, but it doesn’t work in all situations. Apple, being a company that tries hard to make a better experience for the consumer, decided that they should pay more for support US and European customers are used to culturally.
Good!!
Apple should go to Ireland. Good tech support.
I think this is great news.
The prospect of calling Apple and getting some dude I can’t understand, who thinks through a different lens than me, was depressing.
Apple is one of the last decent customer service companies left. Sure, not perfect, but darn good. This is great news.
Now, all that needs to happen is THIS WEB SITE to DUMP the ADS IN THE TEXT.
It’s equally obnoxious
I don’t mind a support center in India for US products….just so long as they open one in southern Mississippi for user’s in India to call.
An Englishman’s way of speaking absolutely classifies him,
The moment he talks he makes some other
Englishman despise him.
One common language I’m afraid we’ll never get.
Oh, why can’t the English learn to set
A good example to people whose
English is painful to your ears?
The Scotch and the Irish leave you close to tears.
There even are places where English completely
disappears.
</b> In America, they haven’t used it for years! </b>
You see, Great Britain ruled the American Colonies for nearly 200 years. Likewise, Great Britain ruled India for nearly 200 years as well, but those 200 years were much more recent. Therefore, the brand of English spoken in India is much more “British” with influences from Hindi and other indigent languages. It’s not just accent, but vocabulary as well.
Look even at the different types of speech in different parts of the same country, as I pointed out in my song about English in England, and in the various parts of the United States. Even France has different accents from north to south, from east to west.
The reason for any kind of customer service is communication, and Americans and Indians simply can not communicate effectively with each other from a linguistic standpoint, not to mention the cultural differences.
To facilitate communication, customer support, for this reason, should be as local as possible– at least in the same country– Americans servicing Americans, (Canadians, eh?), Indians servicing Indians, Franco-Euro workers servicing Franco-Euro customers. You see my point, I’m sure.
This is not a reflection on the native residents of India, most of whom, I am sure are fine people.
However, for good customer service, it’s time to come back onshore.
Interesting suggestion, Mark, coz that could mean 24 hour service for both Indian and US mac users, local during their waking hours, cross continent after hours.
Bad move from a business perspective. Jobs would do well to read “The World Is Flat”.
India’s labor is too expensive now. Just means these companies will look to Vietnam and China next.
Scarbro: “Bad move from a business perspective…”
Well, if we look at the business decisions Jobs et al have made in the last few years I think we can agree that the balance sheet suggests they have a pretty good idea what they are doing.
JEG, don’t worry too much; Apple just picked up a sizable property in Newark (just north of Cupertino) for some sort of support center.
I know I’ve placed orders for new hardware and spoke to people in Ireland at the time. So sales at least are done through there.
“Apple should go to Ireland. Good tech support.”
Oh yeah. And it’s not like Irish people don’t have an accent…
Peter – sure, the Irish have an accent. So do folks from North Dakota and Boston and Alabama and New Orleans and LA…. and they’re all different. What’s your point? Communications isn’t about accents, it’s about understanding what is being said, conceptwise, culturally, etc… Can you grasp the other person’s intent, meaning…? can you explain things several ways, if necessary? Are you doing something besides reading a script? Those are the things that matter in customer service, besides being able to think your way through a problem, which includes knowing that not everyone you talk to will have the same level of technical knowledge or ability to meet you halfway. That’s why good customer service is hard to find, regardless of the language. No authority to make “real” decisions, pressure to handle as many calls as possible, work routines which basically chain workers to their chairs on a rigid schedule (ever had to wait till the scheduled time to hit the loo, especially after all that coffee decides it needs somewhere to go??)
Anyway, I had the greatest time last weekend yakking until the wee hours with a Scotsman and his dad who were visiting the US. Yeah, they had the classic accent. But, they were some of the most articulate, knowledgable, informed, charming folks I’ve spent time with in a long time. It didn’t take long to adjust to the accents, thick as they were. I imagine they had to deal with my own lack of a brogue. As time went by, I didn’t even notice the accents anymore. There were lots of alternate vocabulary words, but in the end when two people want to communicate, accents certainly won’t be a deterrant.
Now, ask me about native foreign language speakers who only understand rudimentary English and that might definately be a problem. Often, with Indian service centers the English is very basic, and scripts are used, to the point where they will even say they are in the States until questioned harder. That isn’t customer service, that’s Dell!!
Those of you who are applauding this development need to understand something. A tech company typically makes the decision to expand it’s customer services b/c it expects a commensurate expansion in the number of customers it will have to, um, ‘service’ in the near future.
Keeping that in mind, the only relevance India had in Apple’s original decision to build such a large call center there, was in relation to the amount of money they expected to save by going ‘big’ there as opposed to what it would cost them anywhere else.
In other words, the larger the expansion, the more attractive a low wage country like India is. Absent a huge expansion in expected customers, the less attractive India is (if for no other reason than to avoid the possibility of pissing off said customers with bad service).
Look at DELL; they did the same exact thing when it became clear that they couldn’t afford the costs of scaling their call services in N. America, in lock step with how fast their customer base was growing at the time. They still kept some of their call service in Austin, TX, but the overall effort had to be supplimented by offices in Bangalore for costs sake. So Apple’s decision to go there too had to be based on pretty high expectations of market growth in their computer division, just as it was for DELL when their sales were off the charts. This also fits with the timing of the research that would have occured prior to the Bangalore announcement – that was concurrent with Apple’s 30% sales growth spurt in the ’04-05 period. Not incidentally, this also would have been before the decision to go ‘Macintel’ was made (we know from many sources that this was a last minute decision made by Jobs himself, sometime in late 04/early 05).
Now, if big sales growth goes hand-in-hand with a big service expansion, then it follows that the opposite is true; that an expected slowdown in sales would scuttle such an expansion. So Apple’s sudden announcement that they’re NOT going to India – after having already spent money on building the center & training the personnel – more than likely indicates that they don’t forsee their computer sales being anywhere near as positive as they once did.
This too fits with available info; Apple’s sales after the 30% spurt have been off, and just recently they announced that the numbers, while still positive, are well below the industry average. Maybe it’s the Osbourne Effect, or maybe it’s the $100 or so they’ve increased prices for all their entry-to-mid level Intel based products they’ve rolled out (this when the rest of the industry is lowering prices), or maybe it’s simply the fact that using Intel CPUs and chipsets is killing the margins they once enjoyed with PPC on all their products … or some combination of ‘all of the above’. Pick your poison.
Nonetheless, with Apple pulling the plug on their big call center plan in more affordable India (the mecca of lowcost English speaking countries), any other actions Apple takes along these lines anywhere else (i.e. a more expensive country) will by definition be more modest. That’s assuming that there will be any further actions, and that Apple saying they’re ‘going somewhere else’ is just them laying smoke to obscure a bad situation. In other words, this could be a not-so-subtle message that sales not only aren’t as good as Apple once thought they would be by now, but also that maybe they don’t see them getting better anytime soon either.
Food for thought
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MDN magic word = “party”
Could the party be over for AAPL?
Steve “Di*k” Jobs et al,
A two-month severance package is a sweet deal! Indeed, it is a lot better than some employees in the USA get after 20 years with a company.
There is evidence to support the assertion that Steve Jobs has been less than a nice guy at times — especially around the time of the original Macintosh project. But I don’t think that this India fiasco can be used as evidence that Steve Jobs is a “Richard”.
Indeed, I remember reading an interview transcript awhile back in which Jobs essentially said that being ousted from Apple in the 1980’s taught him some tough lessons — including humility. I think that Jobs’ apology for the 3.0 ghz disaster shows this to some degree. His RDF continues, however.
TTzz, you’re right. Wrong choice of words on my part but I still think he should read “The World Is Flat”.