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EDS sends IT work Down Under

In a move that highlights the flight of U.S. information technology work overseas, Electronic Data Systems is adding 360 jobs to its operations in New Zealand.

In a move that highlights the flight of U.S. information technology work overseas, Electronic Data Systems is adding 360 jobs to its operations in New Zealand.

Plano, Texas-based EDS, which provides a range of IT services, said Monday that it would add 360 jobs to its current New Zealand staff of 2,300 because of a grant of roughly $840,000 from the government of New Zealand.

The company said the grant will help it expand its network of facilities providing clients with software services such as application development and testing, as well as help-desk services and so-called business process outsourcing. Business process outsourcing (BPO) involves an outside company taking over various back-office functions, including procurement, invoice processing and the like.

EDS said it would match the grant with a multimillion-dollar investment.

"New Zealand's stable political environment, growing economy, competitive cost structures and flexible and skilled IT work force make it an ideal location for the EDS 'Best Shore' program," said Rick Ellis, managing director at EDS New Zealand.

U.S.-based IT services companies have been rushing to expand their overseas operations to cut fees for customers and compete with Indian IT services companies. One of the services being provided from abroad is business process outsourcing, which also represents a key area of growth for IT services companies.

Critics of the shift of IT work overseas have raised questions about the skill levels of Indian programmers and the effect of "offshoring," or the moving of work overseas, on U.S. workers. An advocacy group, the Washington Alliance of Technology Workers, has called for a congressional study of the trend.

Last fall, EDS launched its worldwide "Best Shore" initiative, which aimed to undercut the prices of IT service competitors. EDS's office in Wellington, New Zealand, is one of its 16 best-shore facilities. EDS also has an office in Auckland, New Zealand, and the new investment will allow the company to develop a best-shore center there as well, company spokesman Travis Jacobsen said.

EDS New Zealand already is handling applications work for Coors Breweries and contact center work for U.S.-based ChevronTexaco.