Shipping work overseas saves money that drops to the bottom line as profit.  Stock prices are today keyed to earnings-per-share as is, to a certain extent, executive compensation.  Now look at the average time that an institutional investor actually holds a given stock.  This can be measured in months, sometimes in weeks, but hardly ever in years.  So the investor timeline is short and the CEO timeline -- with average tenancies in those positions at less than five years -- is not much longer.  So offshoring works great for these two groups.  The stock goes up and along with it, the CEO's bonus and stock options.  By the time the long-term effects of this policy are felt, both the investors and the CEO are long gone.  And even if the CEO is still around, it is with a golden parachute negotiated long before that often pays him more to go away than he might have got to stay.

PBS Cringely on IT Outsourcing