ILPC 2027

The IT and telecommunications sector, as both developer and user of key technologies for coordination and communication, has restructured and re-shaped its value chains for decades, This restructuring has presented various challenges for trade unions  (Bruyn & Ramioul, 2006; Drahokoupil, 2015). While incumbent telecommunications companies were historically strongly organised, unions struggle against fragmenting industrial relations and increased transnational competition and face complex issues of aggregating interests and maintaining solidarity across diverse paths of transnationalisation.In recent years, patterns of restructuring take a new shape that has been described as “fine-slicing” of the value chain (Linares-Navarro, Pedersen, & Pla-Barber, 2014) and as a mechanism of “commodity traps” (Zysman & Kenney, 2015). The paper explores the evidence for such an approach in the ICT sector and the impact on trade unions. It is based on a study of outsourcing and offshoring in the ICT sector for UNI Europa consisting of desk research into company strategies, job creation and job losses in the sector, case studies of selected companies including interviews with union representatives and some managers, and a small survey and ongoing discussion with UNI and its affiliates on unions’ strategies and practices.  

In telecommunications, from the 1990s onwards, competition was shaped by transnationalisation and globalisation, the digitalisation of telecom technology which is gradually converging with the Internet (Holtgrewe, 2014), and a rapid trade in telecom companies through a sequence of mergers and acquisitions. Outsourcing and offshoring became key parts of telco strategies to cut cost, improve competitiveness and transfer some of the risks of investment into new technologies. After outsourcing customer services and own IT services, currently equipment vendors are changing their roles to become comprehensive service providers that integrate standardised and highly specific technologies – hence taking over a former core competency of telco companies. In addition, new functions and divisions of labour emerge: virtual providers and OTTs (“over-the-top”) provide telecommunications services over the Internet across multiple devices. Start-ups develop new technologies, apps and services for providers to integrate into complex service bundles. Finally crowds (mediated through other platforms) may be found to source modules of work and innovation from.

For trade unions, companies’ growing experience, the wider options and longer value chains suggest that ad-hoc responses to downsizing and relocation of work are not sufficient. The paper outlines ongoing discussions among European trade unionists. A central risk is a latent nationalism in observing relocations. Eastern European regions and also Portugal are seeing some expansion in various parts of the markets and developing regional clusters of shared services, customer service, network operations and consolidated IT services. It is easy to perceive some unfair competition and undercutting of wages and working conditions from a West European perspective – while East European colleagues are feeling stuck in comparatively low wages, long work hours and high demands on their flexibility. Their companies may “move up” value chains, but not necessarily workers themselves. Work that has been relocated, may well be relocated further.