Plans for an Indian tech support center have been scrapped. A cautionary tale

Apple CEO Steve Jobs has long had a thing for India. After working at game developer Atari in the mid-’70s, Jobs took a break and backpacked around the subcontinent in search of spiritual enlightenment. Upon his return to the U.S., his more capitalistic instincts took over, and he and Steve Wozniak launched Apple. Today, of course, the seeker-turned- billionaire enjoys a reputation as one of the most successful entrepreneurs and savviest marketing minds on the planet.

Yet he is also a tough-minded executive who knows when to cut and run. That’s why Apple Computer Inc. has shelved plans to build a sprawling technical support center in Bangalore, even as IBM and other tech powers are ramping up. Just three months back, Apple appeared to be on the same trajectory, and there was talk of the company hiring 3,000 workers by 2007 to handle support for Macintosh computers and other Apple gear. Many in India even speculated that Jobs might travel there this year to publicize Apple’s commitment to the country.

It wasn’t meant to be. In late May, Apple dismissed most of the 30 new hires at its subsidiary in Bangalore. (A handful working in sales and marketing will stay on.) Spokesman Steve Dowling would say only that Apple had “reevaluated our plans” and decided to provide support from other countries. Another source familiar with the situation, though, says the decision was cost-driven. “India isn’t as inexpensive as it used to be,” the source says. “The turnover is high, and the competition for good people is strong.” Apple feels it “can do [such work] more efficiently elsewhere.”

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