By CHRISTINA DYRNESS, Staff Writer

Software companies started by Richard Holcomb over the past two decades have employed scores of Triangle programmers.

But with money tight and customer expectations high, Holcomb's latest venture, a Web services software company called StrikeIron, will design its product in Durham but send the rest of the work to eager programmers in other geographies.

"No offense, guys," Holcomb told his co-founders, "but programmers are the textile workers of the future."

In the past decade, big companies from Nortel Networks to Bank of America have shifted information technology jobs to places such as India and Eastern Europe to save money. Nearly all Fortune 500 companies do some outsourcing, and a report by Forrester Research, a Massachusetts firm that tracks technology trends, predicts that 500,000 tech jobs will go overseas over the next decade.

Now technology start-ups, figuring they can save 50 percent or more on salaries, are embracing the idea. And firms with overseas expertise are springing up in the Triangle to help them. But those new firms do not offset the thousands of jobs lost by the Triangle's tech sector in recent years.

The shift overseas is a slap in the face for software developers, who rode the tech boom in the late 1990s to high salaries -- until the bottom dropped out. Triangle tech companies have laid off more than 7,300 workers in the past two years, and those out of work for months are wondering whether the jobs will ever come back.

"What do I need to train myself for so I can have a job next year?" asks 57-year-old Jim Budelman of Cary, who was a software and system developer with Unisys until late 2000, when he took an early retirement buyout to avoid being laid off. He is updating his skills and has had a handful of job interviews. He says he would gladly work for a fraction of the pay he made during the boom years.

"There are a lot of people who don't have jobs, and they ship them to India," Budelman said. "I don't know what to do next."

The trend further weakens the state's fragile job base. North Carolina has lost more jobs as a result of free trade than any other state, many of them in textiles. As of January, 141,000 low-skill jobs in the state have gone overseas since 1994, according to the U.S. Department of Labor.

Mirsad Hadzikadic, dean of the College of Information Technology at the University of North Carolina at Charlotte, is studying the issue and is concerned.

"It's not the same as losing textile and manufacturing jobs," Hadzikadic said. "With those, there was this promise of better opportunity with high-tech. This time, there's no such promise."

While state government officials are aware of the exodus of high-tech jobs, there's no data to say just how many have been lost.

Joan Myers, president and CEO of the N.C. Electronics and Information Technology Association industry group, says she wishes the state would do more to help.

"These are the highly paid, highly skilled jobs that we don't want to move out of North Carolina borders," Myers said.

The association supports legislation to increase the state's research and development tax credit as a way to improve the business climate for high-tech companies. "We don't want to see the next wave of outsourcing be the [research and development] component -- that's your heartbeat."

But even those who are alarmed by outsourcing say that businesses are only reacting to the realities of a global economy, and that the future will bring more of the same. Tech research firm IDC says money spent on global outsourcing will grow from $56 billion in 2000 to $100 billion in 2005.

Entrepreneur Michael Lai Le, for example, started International IT Services in Raleigh in October, already has offices in Vietnam, and plans to open operations in Australia and China. Le, a native of Vietnam who moved to the Triangle in 1994 as a consultant with IBM, points out to critics that his company is a U.S. company paying U.S. taxes, even though it has only six U.S. employees.

Setting up an outsourced development center, Le says, has become an accepted practice in the information technology industry. "It is an irreversible reality," Le said. "It's no longer a trend; it's strategic to these companies."

Serenus Technology Services of Durham has a similar model, aiming to help start-ups work with programmers in Russia.

Le says that since start-ups can now take advantage of low-cost outsourced programming, the local economy will get more new companies. He also suggests that companies who pay the much lower salary for programmers, rather than the $100,000 paid stateside, will have more money to retrain workers for more advanced or management-level tech jobs.

Proponents of outsourcing also stress that high-level jobs -- project managers and experienced programmers who oversee software development -- will stay here.

Alan Tharp, head of N.C. State University's computer science department, got the message from the school's strategic advisory board -- technology executives who advise the department on its curriculum -- that programmers need to be able to do more than write code. This fall, NCSU will add a leadership skills course.

"We want our students to have skills to separate them, and allow them to remain gainfully employed," Tharp said.

Still, Matthew Marotta, chief executive officer of a 12-employee software company in Cary, Data-craft Solutions, worries that universities are filled with students studying tech while the jobs are going overseas. "I have strong feelings about making sure our Americans are at work," Marotta said.

Jeff Boynton, vice president of Trans Logis Systems, hears that sentiment often. Boynton runs the outsourcing division for the Apex business software company, which has a development lab in India.

Boynton said that several executives, including Marotta, said, "No thanks" when Trans Logis suggested they save money by giving work to its programmers in India. "There's a groundswell of support for local hiring," Boynton said. As a result, TLS has added programmers in Apex, doubling its development staff from three to six people -- compared with 32 programmers in India.

Still, there are those like Bob Tanzi, who throws up his hands and gets a little heated when he talks about the exodus of tech jobs.

Two years ago, Tanzi, president of R.M. Tanzi & Associates, a contract software development and information technology services firm, was handing out high-paying tech jobs like candy canes.

But when GlaxoSmithKline, his main client, put its contracted tech services out to bid, Tanzi could not compete with companies that sent work overseas. He went out of business.

"When do we say enough is enough?" asked Tanzi, who has gotten out of technology and now recruits motocross sponsors with his new company, HTMX Racing of Durham. "I guess what I'd like to see is the first people we take care of is our own."

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