Thread regarding Sabre Holdings layoffs

Globalization, good for Sabre?

Is globalization good for Sabre?

It's certainly good for labour in developing countries like Poland and India. Labour in KRK and BLR now have thousands of Sabre jobs paying good local market salaries. These jobs were created because labour costs are lower in these locations than the global average labour cost of developed countries and developing countries combined.

It's certainly bad for labour in developed countries for the opposite reason. Labour costs are higher than the global average so staff numbers are reduced to the bare minimum there while they increase in cheaper developing countries.

It seems like a simple financial equation.

But is it good for Sabre?

Are 9000 developing country staff better than 3000 developed country staff?

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| 1821 views | | 8 replies (last March 18, 2018) | Reply
Post ID: @OP+S9PpBZS

8 replies (most recent on top)

balance is what is best. if every vp - manager really embrased that there would be no real problems.. Mandates arent balance though

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Post ID: @6wgg+S9PpBZS

What's the APAC story?

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Post ID: @1mpg+S9PpBZS

As a manager, when a US employee leaves, I am told to hire in MVD or BLR. It is not negotiable and I'm certainly not at liberty to hire the best candidate no matter the location. I'm given the location and the salary limit. You make do with what you can get.

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Post ID: @klp+S9PpBZS

Agreed. Globalization done the Sabre way is terrible for Sabre. Just ask AsiaPacific.

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Post ID: @dgj+S9PpBZS

While I agree by average skillset in "developed countries" is better that is not that simple. Sabre staff seems very mediocre for US IT standards. I am not sure why is that, but suppose the company can't afford better employees (where the hell are all those 30+ smart developers???). This means the question is a bit different. Is it better to have fewer US people (native speakers), but less competent vs more resources with some communication problems (second language), but more competent. I am talking about "IT competence" as over time it is where the whole world is going. So called "business skills" will mean less and less in favor of generic technology/product skillset with all this dynamic environment and everchanging products, trends and paradigms. I think Sabre should shrink US personel and use dollars wisely to hire fewer, but better resources.

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Post ID: @fjj+S9PpBZS

It's not just a simple question of labor in developed countries being expensive and of labor in developing countries being cheap.

The USA is very expensive because firms bear all the labor costs directly. Staff there have high costs because the costs of healthcare, education, and retirement are the highest in the world. The cost of living in the USA varies widely from San Francisco California to Nowhereville in fly-over country but the apparent cost of living is far lower than the actual cost of living.

To retire on median income in the USA requires $1.8 million in assets. Median US income is probably about 1/3 of the median Sabre salary. How many US Sabre retirees have $1.8 million in assets to maintain that median income through retirement? How many have $5.4 million in assets to maintain their Sabre income through retirement?

Public education in the US is globally ridiculed. A 2 year old child in Japan is probably mathematically more proficient than a 17 year old teenager in the USA. Yet, as bad as US public education is, it's also one of the most expensive in the world. Private education is even more expensive. University in the USA is more about sports than education. Students need only show basic reading, writing, and arithmetic skills to qualify for university. They often spend their first few years at university not even knowing what degree subject to pick but the University is happy to take their money anyway, to the tune of tens of thousands of dollars. Either the parents foot the bill or the students graduate under the weight of tens of thousands of dollars of student loan debt.

Medical costs are the number one cause of personal bankruptcy filings in the USA. Unlike other forms of insurance, like car or home insurance, you cannot reduce your need for medical insurance through personal choices. If car insurance costs are high then someone could choose to reduce their costs by buying a cheaper car or driving less. If home insurance costs are high then someone could choose to reduce their costs by buying a cheaper house or buying less furnishings. If medical insurance costs are high them someone can only choose to buy cheaper medical insurance, which is only cheaper because it insures less, which means that when its needed the out of pocket expenses will be more expensive. Someone might be lucky, they might never need medical care. Someone else might be unlucky, they might slip on some ice on some stairs and break their back or they might get cancer. Just a few years ago people were charged extra when signing up for insurance if they had a preexisting medical condition and if your medical treatment costs exceeded an amount they easily could during the first few years of life, because commercial healthcare in the USA is the most expensive in the world, then those people couldn't get insurance at all as they had already reached their lifetime maximum. Imagine a baby who after 6 months in the Intensive Care Unit emerges healthy finally but who can never get medical insurance again for the entire remainder of their life. To offset these extreme costs, employers subsidize medical insurance costs of their employees by pooling all the employees into a company-wide risk pool. It keeps employees beholden to their employers because they cannot afford to buy their own independent medical insurance. This ensures employees work harder and longer hours in fear of being laid off and losing their medical insurance.

So it's not a simple question of developed countries versus developing countries.

The USA is a particularly expensive developed country when it comes to labor costs. There are plenty of less expensive developed countries. Developing countries are cheaper but have their own disadvantages due to growing pains.

So Sabre could hire 3000 US staff or 6000 staff in the UK, Germany and Australia or 9000 staff in Argentina, Poland, India, and Uruguay.

What's best for Sabre is to hire the most cost effective people they can globally. It's an around the clock service but everything isn't around the clock. System operational support is around the clock but development and strategic planning isn't. Divide the world into 3 8-hour timezones: Americas, EMEA, Asia and locate their customer operational support staff in a low cost labor country the middle of each timezone: Uruguay, Poland, India. Development work can be located anywhere because it is not tied to the customer business hours so it's located in a low cost high country that has reasonably high skills to cost ratio: Poland. Sales and marketing is closely customer-bound so those staff will need to be local in each customer area. This leaves strategic planning for the headquarters location.

That's the theory. In reality the operational support team requires significant assistance from the development team and effective strategic planning requires technical knowledge from the development team also.

This means that the development team in Poland leads Sabre. That's the reality for Sabre in 2018. As a low cost labor location, the staff in Poland are less beholden to Sabre and are less loyal to Sabre. Staff in Poland can, and do, leave Sabre whenever a better opportunity arises, and one often does arise within just a few years. This means that Sabre is being led by staff in Poland who hold only their own best interests at heart, unlike US staff who depend on Sabre for their expensive cost of living (particularly medical costs). Staff in Poland steer Sabre in the direction that most advances their personal long term goals and future job prospects after Sabre: CV/resume padding.

How many Polish posts do you see on this site bemoaning Sabre offshoring to another low cost location? Not many. If employees are dependent on Sabre then they will be loyal to Sabre and then Sabre's best interests are their own best interests. Loyalty requires a commitment of at least 15 years. Unfortunately, strategic planning executives in headquarters are unlikely to even stay 5 years before quitting. Fortunately it's not that difficult to differentiate between the competent long termers who remain due to loyalty and the incompetent ones who remain due only to necessity.

Globalization isn't bad for Sabre but the way Sabre has globalized is bad for Sabre.

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Post ID: @gwg+S9PpBZS

It sounds like an executive, no doubt European by birth based on spelling is torn by the thought of having to offload good paying jobs to low cost centers.

Make no mistake, there is a price with getting what you pay for. Do you enjoy rework due to poor communicstion? Do you like working with those whom have been taught to cheat the system with inflated skills they read about from a forum last night? Offshoring comes with a steep price tag of customer satisfaction, quality, and stamping out chance of innovation. Add to this the lack of understanding of requirements or best practices in software development and you have a costly mistake on your hands.

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Post ID: @mae+S9PpBZS

@S9PpBZS: - what do you think? at the end of the end quality of work matters based on airline business knowledge..

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Post ID: @lvt+S9PpBZS

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