Tech, media hiring boosted by move to digital

NEW YORK Thu May 17, 2007 8:30pm EDT

Ubisoft President and Chief Executive Officer Yves Guillemot speaks during the Reuters Global Technology, Media and Telecoms Summit in New York, May 16, 2007. REUTERS/Keith Bedford

Ubisoft President and Chief Executive Officer Yves Guillemot speaks during the Reuters Global Technology, Media and Telecoms Summit in New York, May 16, 2007.

Credit: Reuters/Keith Bedford

NEW YORK (Reuters) - Programmers and engineers again have the advantage when it comes to global hiring, as the transition to digital makes everyone from cellular providers to movie studios expand their technology operations.

Executives speaking at the Reuters Global Technology, Media and Telecoms Summit in New York this week said they were looking primarily for software expertise, as well as digital advertising knowledge, sales reps and call center staff.

A move to outsource technology work to lower-wage countries such as India and China has grabbed headlines for years. But many speakers said they were expanding hiring in the United States and Europe to help support the next stage of Internet entertainment and commerce, sometimes called "Web 2.0."

"We're looking very much for software engineers," said Nokia Oyj (NOK1V.HE) Chief Financial Officer Rick Simonson. "We sell devices which is hardware, but our R&D spend which is just below 4 billion euros ($5.4 billion) a year ... is primarily software related."

Nokia is building a plant in Hungary and has been investing in increased capacity in Romania and Mexico, he said.

Movie and television producer Walt Disney Co. (DIS.N) had a similar answer as it builds out entertainment and news Web sites, virtual worlds for its fans and delves more deeply into mobile communications.

"We have a fairly significant team in Seattle ... that is a core engineering and technology hub for all of our operations across the company and we're continuing to hire a range of engineering talent there," said Disney Internet Group President Steve Wadsworth.

In some cases, knowledge of key target markets trumped cost advantage when it comes to bulking up on staff.

"I was surprised to see that last year we hired more people in Canada, France, the U.S., than in China, Romania or Morocco," said Yves Guillemot, chief executive of video game publisher Ubisoft (UBIP.PA).

"For the next generation (game) consoles, our teams wanted to recruit more in France and in the U.S. and in Canada" because the creative talent there was more attuned to what novel features would suit the machines, he said.

NOT AN INFLATIONARY ENVIRONMENT

Wages in China and India are rising as more companies move technology operations there, though are still far from the salary levels in the United States and Europe. Within those categories, there are distinctions, executives said.

"Based on our experience, China is at least 15 to 20 percent more expensive than India," said S. Ramadorai, CEO of Tata Consultancy Services Ltd.(TCS.BO) , which hires more than 90 percent of its employees in India.

Telephone and wireless giant Verizon Communications Inc. (VZ.N) prefers to develop its technology infrastructure internally, said Chief Operating Officer Denny Strigl.

"We think that this does give us a cost advantage," Strigl said. "We have no plans at least that I'm aware of further outsourcing at this point."

Higher demand in the United States to support everything from online video or double-digit growth in Internet advertising sales is still not translating to wage inflation, but that could be a question of time.

"I went through the (technology) bubble of the late 1990s and there was certainly massive wage inflation" in the United States, said Disney's Wadsworth. "I think frankly that has helped temper a lot of people managing business and growing businesses here."

Possibly the best news is for recent college graduates, who could see a rise in recruitment as large technology companies try to capture more growth from small to mid-size businesses.

"I actually think in this new world ... there's going to be a big place for post-college graduates," said SAP (SAPG.DE) (SAP.N) America CEO Bill McDermott.

"They can cut their teeth dealing with small and mid-size customers with innovative solutions," he said. "What that gives us is a lower-cost sales model ... which is something I think we need to do to expand the margin."

(1 euro = $1.35)

(Additional reporting by Franklin Paul and Robert MacMillan)

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