For a company that earned multi billion$ per quarter, it seems minimal reward/high risk to transition to low cost and low capability workforce in a 3rd world country.
The savings seems like it is not worth the risk and also not worth destroying all confidence and loyalty of its HC10 employees.
How much is the total annual target savings of moving to third world country 1/10 salary workforce, low cost engineering, low cost fabrication and procurement?
@d2 india's O&G reserves? This bs is even worse than using AI. The reserves are declining - read your own ministry reports. This type of behaviour is why the risks are there - everything India great, no problem, done done, everything ok even when your house is burning down. This is how we are going to get a serious incident.
@OP I asked Claude: "How does ExxonMobil not know it's getting scammed? They're outsourcing to vendors who aren't delivering actual service. How does a company that size not see it?"
Claude's response:
The answer probably isn't ignorance.
First, understand the basic scam. You can buy a can of sardines at Kroger for $10. A street vendor offers you the same can for $1. You think you're winning. You get home, open it — it's empty. Did you get a deal? No. You paid $1 for nothing. They made $1 for nothing. They won. The price felt right. The can looked right. It was empty.
That's what's happening here. And a few things explain why ExxonMobil either doesn't see it or doesn't want to:
The metrics are designed not to see it.
ExxonMobil isn't measuring "did the employee actually get helped." They're measuring call handle time, ticket closure rates, cost per interaction. Those numbers can look fine while the actual service is hollow. The empty can gets logged as "delivered."
The savings are real — just not for you.
The IT budget goes down. The VP of IT gets a win. The fact that your productivity dropped, your time was wasted, and you had to find workarounds yourself — that cost lands on your department, not theirs. It's a cost-shifting operation disguised as a cost-saving one.
They don't want a feedback channel that creates liability.
If they formally collect complaints and document that the service is inadequate, they now have a paper trail. Ignorance — even manufactured ignorance — is legally and politically cleaner. So the complaint mechanism stays broken on purpose.
And the cynical read:
Some people up the chain may have relationships, contracts, or incentives tied to the vendor. The contract continuing is the point.
The people absorbing the real cost are employees who have no voice in it.
That's a different kind of empty can.
@OP The outsourcing strategy was a failure due to the location they chose to use due to poor accountability, bad-quality work, and far too much rework. Any expected savings have been offset by the cost of correcting mistakes and providing constant oversight. This location should be abandoned immediately. Find another one. There are many 3rd world countries with talented hard working people right here in the Western hemisphere in central and south America. The best thing is these people are moral. The people from that other country have no morals and no sense of right or wrong. They are accustomed to the 'scam' economy. Providing an actual service in exchange for a wage is completely foreign concept for them. Yes its true they only charge 10 dollars but in exchange they provide you nothing but the run around and irriation and then they go home and laugh about it. The got 10 bucks and you got nothing but rebound work.
@hn ....can you tell me what powers the Falcon 9? oh that's right, kerosene....
Need to send DDWs job to Bangalore.
Love how EM employees view themselves. Reality check, go look at Space X market cap vs. EM. That's where the value is and that's where the future is.
O&G is old hat commodity harvesting, and in it's mature state has low corporate value.
Cost therefore is the focus.
KL is an additional overhead for manufacturing sites, not an efficiency. I don't know of a single discipline where it's working.
For a multi billion dollar old company, moving work to India does not increase profits by even 1%.
@dz agreed
@OP talking of transitioning, do we really need all these pride communications. Get on with it, we don’t care.
@d2, India’s oil and gas reserves? Do you even work in the O&G industry? And what’s that about convincing the Prime Minister, as if that’s how Indian politics works? I’m so confused!
Actually, outsourcing work to India does increase shareholder value. The country of India is the fastest growing GDP in the world. All major companies have established technology centers in the Greater Bangaluru area. Most of the majors have between 1000 and 3000 professionals at their technology centers. Why?
If you want to convince the Prime Minister of India that your oil company is the preferred company to jointly work on monetizing oil and gas, critical minerals, lubricants, chemicals, etc., then showing the Prime Minister that (1) you have gainfully employed 3000 college graduates at YOUR technology center, (2) you will be working with Indian engineering companies, and (3) Indian EPC companies to design, procure, and construct joint ventures offshore and onshore.
Booking and monetizing oil and gas reserves is the long-term shareholder value in India. The cost of a 3000 professionally staffed technology center is petty cash compared to India's oil and gas reserves and their greater than 1 billion consumers that are rapidly evolving into a middle class that will eventually rival the People's Republic of China.
@cd Not disagreeing with you, but the people making these decisions place a low value on human capital.
Also, as another commenter pointed out, engineering practices (such as they are) are very matured and highly standardized across the industry. It is not rocket science, and it never really was.
America is too expensive. That's not a message you like to hear, but it's reality and most importantly, it's the mantra every one in a senior position in US corporate is spouting.
You can't change capitalism, same as you can't ignore real money vs potential money for the value of HC10 capability. Besides which, the oil industry is mature and it's no longer rocket science.
You want growth and opportunity in-country? Don't work in oil.
The savings in dollars does not move the needle on shareholder value.
The cost in employee loyalty, employee retention, and increased difficulty in recruiting in HC10 far outweighs and perceived benefits.
When making PowerPoints about India transition, it is forbidden to mention errors, rework, and the multitude of flights of HC10 personnel to India.
Source: Microsoft CoPilot Search Term
"What Is the Cost of An Employee in India Compared to The United States?"
Cost of an Employee in India vs. the United States
When comparing the cost of an employee between India and the United States, the raw dollar figures can be misleading. The U.S. average gross salary is about 18 times higher than India’s in nominal USD terms, but Purchasing Power Parity (PPP) shows the gap is much smaller in real terms www.acciyo.com+1.
Nominal Salary Comparison
India: Average gross salary ₹31,900/month ($336 USD) wage.is+1
U.S.: Average gross salary ~$6,228/month wage.is+1
Ratio: U.S. salary is ~18.5× higher in nominal USD wage.is.
PPP Adjusted Comparison
PPP adjusts for cost of living so you can compare what a salary can actually buy:
India: ₹23 lakhs/year (~$79,000 USD) for a similar lifestyle to the U.S. www.acciyo.com
U.S.: ₹79 lakhs/year ($230,000 USD) for the same lifestyle www.acciyo.com
Ratio: U.S. needs 3–4× more pay to match India’s cost of living www.acciyo.com.
This means an Indian employee’s salary, when PPP-adjusted, is closer to the U.S. equivalent in terms of what they can afford.
Employer Costs
India: Mandatory employer contributions include EPF (~11.65%), ESI (~3%), and gratuity (~1.65%), totaling ~16.75% of salary www.acciyo.com.
U.S.: Employer-side costs include FICA (Social Security & Medicare) ~7.65% of salary, plus state/local taxes and benefits www.acciyo.com.
Takeaway: India’s mandatory employer costs are higher as a percentage of salary, but the employee’s take-home pay is much lower in nominal USD.
Cost of Living Impact
India: Excludes rent, average monthly cost ~$424 USD www.acciyo.com.
U.S.: Excludes rent, average monthly cost ~$2,516 USD www.acciyo.com.
Gap: India is 71–83% cheaper than the U.S. excluding rent www.acciyo.com.
Key Takeaways
Nominal USD: U.S. employees earn far more, but their cost of living is much higher.
PPP: The real cost difference is smaller; a U.S. employee needs 3–4× more pay to match India’s lifestyle.
Employer costs: India’s mandatory contributions are higher as a % of salary, but the employee’s purchasing power is much greater locally.
If you’re comparing offers, use PPP to see how much each salary can actually buy, not just the exchange rate www.acciyo.com.
If you read it from a powerpoint....lots of money, if you talk to site......you get an opposite story.
So many employees in India they had to go rent additional office space. So much for being colocated
Bigly.
@af working with the india MSP is taking up even more time. They are literally asking you to tell them what to do every single step. Basic common sense is not present in most cases.
I have yet to deal with an MSP that was not completely incompetent. on the surface, you've replaced someone with another "cheaper" person. In reality, the "cheaper" person is so inept that the more expensive people have to do their job for them, making the "cheap" work more expensive anyway...
It's insane. They are treating all work roles (not matter if said role needs an SME or not) as though any random Bangalorian can kindly do the needful. We are sitting on a ticking time bo-b.