Telstra says storm in an Indian outsourcing teacup

The ruckus was sparked by a report from Melbourne's Herald Sun which said Telstra employed 100 Indian programmers paying each as little as $12,000 a year to do the work of Australian IT workers. The Herald Sun cited an internal memo that reportedly outlines an IT review to improve efficiencies from Telstra's CIO Jeff Smith, which said the scheme would save Telstra up to $18 million a year.

Telstra and outsourcer Infosys technology have refuted the report which claimed Indian IT workers were being paid “sweatshop wages”.

The Community and Public Sector Union (CPSU) jumped into the furore. CPSU national secretary Adrian O'Connell expressed a suspicion that Telstra is scoping its IT work with a view to having all of that work outsourced to Indian companies, a move the union body claims would undercut the work of existing Australian IT staff at the telco.

In response to the claims, Telstra CIO Smith confirmed staff were being provided by offshore software development companies Infosys and Satyam on a project-by-project basis. Smith said the report was “sensationalist, mischievous and misleading”.

“Telstra has no intention of replacing any of its IT employees with staff of external IT providers, from India or elsewhere in the world,” he said. “IT is a global industry and like many other Australian companies and government departments, Telstra engages a number of world-leading multinational organisations to provide consulting and IT services,” he said.

Smith added that Satyam and Infosys have affirmed they pay their IT staff “at or above market rates in the many countries in which their people are employed in order to attract and retain the most highly skilled IT workforce possible.”

Infosys Technologies also issued a statement which said it “values its human capital immensely” and “rewards employees commensurate with their skills, experience and performance”.

“Infosys respects the law of the land and practices compliance in letter and spirit, in every market place. Infosys' continuing corporate best practices have been recognised by international organizations,” the statement reads.