Why Apple walked away from Bangalore, India support center plan

“Apple CEO Steve Jobs has long had a thing for India… Yet he is also a tough-minded executive who knows when to cut and run. That’s why Apple Computer Inc. has shelved plans to build a sprawling technical support center in Bangalore, even as IBM and other tech powers are ramping up. Just three months back, Apple appeared to be on the same trajectory, and there was talk of the company hiring 3,000 workers by 2007 to handle support for Macintosh computers and other Apple gear. Many in India even speculated that Jobs might travel there this year to publicize Apple’s commitment to the country,” Manjeet Kripalani and Peter Burrows report for BusinessWeek.

“It wasn’t meant to be. In late May, Apple dismissed most of the 30 new hires at its subsidiary in Bangalore. (A handful working in sales and marketing will stay on.) Spokesman Steve Dowling would say only that Apple had ‘reevaluated our plans’ and decided to provide support from other countries,” Kripalani and Burrows report. “Another source familiar with the situation, though, says the decision was cost-driven. ‘India isn’t as inexpensive as it used to be,’ the source says. ‘The turnover is high, and the competition for good people is strong.’ Apple feels it ‘can do [such work] more efficiently elsewhere.'”

Full article here.

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Related articles:
Apple pulls planned support center out of Bangalore, India – June 05, 2006
Apple CEO Steve Jobs postpones Bangalore visit until September – April 04, 2006
Apple says Bangalore facility won’t cause any existing American job cuts – March 17, 2006
Apple to send Jobs to Bangalore in April – Tuesday, March 14, 2006
Apple to hire 3,000 for massive technical support facility in Bangalore by 2007 – March 09, 2006

33 Comments

  1. High turnover is certainly a problem in Bangalore. a year or so ago I was supporting a financial institution from a New England site. In a year, there were several defections, most caused when the site moved from NYC to near Boston. Other than that, one left for another job and another was fired. So … 90% retention in a year. For half that year we had a sister site in Bangalore – for off-hours work. They had a 70% retention rate in that half-year and the ones who left were the best qualified/most effective.

  2. Namenotgiven said: It’s just too hard to understand tech support from people with that strong an accent.

    The accent is only half the problem. The Glaswegian McFly mentioned would have had as thick an accent. Her sentence structure would have been much closer to what an American (the largest pool of callers) is used to.

    But that is still only half the problem.

    Culture! So much of what we say, or don’t say, is tied up in our culture. A tech from Bangalore will tie herself in knots before saying “no”. She will have no problem saying “we can’t do that” but would rather slice her wrists than say “I won’t do that” or “you are wrong“. Conflict is “unacceptable” to them.

  3. “How about Scotland? Wouldn’t it be nice to get a nice sounding lassie from Glasgow trying to walk you though a reboot??:

    True, but they should switch her to the sales staff. Think about how many computers she could sell! Also New Zealand and Aussie girls!

  4. Tommy Boy.

    The costs of hiring in countries like India and countries in the Americas are a lot less (specially health care costs which are crippling the US). I have been involved in such projects and I can tell you that the savings are significant. I don’t believe the people are the issue but more like training and presence from the home office at the offshore site.

    My guess is that SJ heard of all the support nightmares from customers of companies like Dell, Intuit, and others (which provide support from India) and it decided to look elsewhere.

  5. DLMeyer has a point. Culture is a big part of it. It’s just been my experience when being routed to India for tech support it becomes a long drawn out process of just trying to understand what the other person is saying. At least on my end, it’s not a culture or racial thing… I just need help from someone I can understand.

    I recently called SBC for tech support for our DSL at work. It was a nightmare. First the fact that SBC DSL is not a good service anyway… then having to talk to someone who is reading off a card with a heavy accent made it even more difficult.

    I don’t think being able to understand the person your talking to for tech support us too much to ask as a customer. If I can’t understand the help desk, then I’ll take my business elsewhere. That’s half of why we’re switching at work to cable. It’s not just the fact that the DSL was glitchy, but that the tech support made the whole experience frustrating.

  6. Holy mackeral…

    American’s do have an accent, but it’s one that I can understand. And since I’m the one paying and they are the one supporting, I believe it’s fair of me to expect someone that I can understand on the other end of the line. If their business model disagrees with that then it’s fine by me, as long as they understand that I’ll be taking my $$ elsewhere.

  7. As a former IT contractor, who went “in-house” after Indian firms crushed all American competition with their cut-rate prices, I can’t help but feel a little guilty glee at what’s happening over there. So salaries are up and business is running elsewhere, huh? What goes around, comes around.

  8. Name not given is right. An accent in and of itself is not a problem, it’s a horribly strong accent that cannot be clearly understood that is the problem. I’d much rather speak with someone with a strong accent from say Boston or Chicago than someone from India that I flat out cannot understand at all.

  9. name not given:

    I sympathize with your frustration about this. But when every American company has sent its jobs overseas, what “elsewhere” choice will we have? We certainly won’t be able to call Mr. Executive at his palatial estate.

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