U.S. software developing giant Microsoft Corp. announced on Tuesday that it had struck a three year deal with Indian outsourcing company Infosys Technologies to provide technology and support services for the Seattle-based company.

The deal, the terms of which are undisclosed, but believed to be valued at over $100 million, will allow Infosys to take the reins on internal IT services in 450 locations in 104 countries.

Infosys will provide global internal IT services including helpdesk, desk-side services, IT infrastructure and applications support, Microsoft said in a statement.

One of the world’s largest and foremost technologies companies outsourcing internal technology and support services is perplexing for many.

“If someone at Microsoft can’t figure out how to do a pivot table in Excel,” The Wall Street Journal’s Nick Wingfield writes, “they can now get the answer a few continents away from an Infosys employee instead of from someone next door who actually helped make Excel.”

“If Microsoft’s $175,000-a-year engineers know so much about Windows,” The Seattle Times’ Brier Dudley asks, “shouldn’t they be able to stop what they’re doing and help their less technically inclined co-workers configure printers and recover lost passwords?”

Microsoft said that the move was simply a way to streamline its internal IT operations, much of which were already outsourced to multiple different firms. Consolidating the service under one provider is nothing more than a cost-cutting measure, Microsoft said in a statement.

“Microsoft has had a concentrated effort to be more efficient and save money,” the company said in the statement. “This was a major area where we could do this. This new contract will not impact our internal resources.”

The company is not shy about implementing cost-cutting measures. Microsoft has long been criticized for its willingness to outsource work and hire controversial H-1B visa holders.

Microsoft has lobbied the federal government on numerous occasions to loosen restrictions on H-1B visas and raise the nationwide cap on the number of them that can be awarded annually.

The program has drawn a large amount of criticism for the toll it takes on American workers. The H-1B visa program is thought to drive down the wages of Americans in certain fields as companies like Microsoft bring in foreign talent and pay less than the prevailing wage. Increased outsourcing is another effect of the program. In the report compiled by the USCIS, Indian outsourcing firms dominate the list of top H-1B visa recipients. Oftentimes, those businesses will bring in foreign talent, train them in America and send them back to India, displacing an American job in the process.

The abuse of the program is so rampant, a 2006 Department of Labor study found that “… H-1B workers may be hired even when a qualified U.S. worker wants the job, and a U.S. worker can be displaced from the job in favor of the foreign worker.”

In 2008, Microsoft was the top U.S.-based recipient of H-1B visas, according to a list compiled by the U.S. Citizenship and Immigration Service (USCIS).

For the 2008 fiscal year, Microsoft was approved for 1,037 of the controversial visas, an increase of 59 from the previous year.

That information was revealed just as the company was announcing a plan to cut some 5,000 jobs by mid-2010 in an effort to save $1.5 billion annually, angering many lawmakers that argued the company should not be cutting American jobs while bringing in foreign talent.

“It is imperative that in implementing its layoff plan, Microsoft ensures that American workers have priority in keeping their jobs over foreign workers on visa programs,” Sen. Chuck Grassley (R-IA) said in a letter to the company at the time.

Apparently, they didn’t get the message.

Print PDF