By John Shinal
SF Chronicle Staff Writer

The growing practice of sending technology jobs overseas has fast become the hottest flashpoint for controversy in Silicon Valley.

That was clear Tuesday at the Airport Hyatt Regency Hotel in Burlingame, where top executives were learning how to export more of their production as labor activists protested the industry's staggering loss of jobs.

Inside the hotel, more than 250 senior executives, mostly from Bay Area technology and financial services companies, gathered for a conference to learn how to cut costs by increasing their use of foreign tech workers, a process known as "offshoring." Two years ago, the conference drew less than half that number.

Outside, about 50 picketers organized by the Communication Workers of America chanted, "Hey, hey, ho, ho, offshoring's got to go" as conference attendees entered the building. Among the picketers were workers who had lost their jobs to overseas competition and others who fear the same fate. Several protestors who are still employed said they had used vacation time to participate.

That the issue of offshoring can attract executives and prompt employed workers to sacrifice a vacation day suggests it is a critical issue for both labor and management. How the two sides resolve it may determine whether Valley tech workers go the way of Pittsburgh steelworkers.

"We've got to bring attention to the fact that when these jobs go overseas, they're not coming back," said Christina Huggins, a communications technician who has worked in the Bay Area for AT&T Corp. and Pacific Bell for a combined 31 years.

One in 10 U.S. technology jobs will move overseas by the end of 2004, according to the technology industry consulting firm Gartner Inc. of Stamford, Conn.

For Huggins, who is also executive vice president of the CWA Local 9415, it's a simple issue of fairness.

"Tech companies made tremendous profits with these workers, now they're throwing them away," she said.

John Popescu, a native San Franciscan, said he was "downsized" in March 2002 when his employer, IAR Systems, moved out of the city. At the time, Popescu said he was an applications engineer making $60,000 per year.

"They knew that when they moved, they would lose me. I told them that," said Popescu, who earned a bachelor's degree in computer science from San Francisco State University in 1992.

Since losing his job, he's been unable to find work despite having filled out at least 150 applications. Where has he applied? His answer: "Where haven't I?"

Popescu's unemployment coincides with the bursting of the tech bubble and the subsequent downturn in the tech industry. The resultant squeeze on profits has forced many tech firms to cut costs to remain competitive. That means cutting the highest-priced workers.

While Silicon Valley software developers are paid as much as $100 per hour, similar work can be subcontracted to an Indian company for $15 per hour.

That's why corporate interest in the offshoring conference has mushroomed, said Gregg Rock, president and founder of the Brainstorm Group Inc., a Boston area events management firm which organized the gathering, called "Nearshore and Offshore Outsourcing."

Exporting jobs overseas has become a focal point for laid-off tech workers. Thus this week's conference has the distinction of being BrainStorm's first event to be picketed.

Rock pointed out that offshoring does have downsides for a company, not the least of which are cultural and logistical issues inherent in dealing with workers halfway around the globe.

Yet the cost savings of offshoring are big enough that the trend may be impossible to reverse, said Rock. "If it's a commodity that can be outsourced, (executives) will do it," he said.

At least one of the workers picketing outside understood that.

Devin Kruse of Cupertino said he has worked for IBM for 25 years, first in New York and, beginning in 1988, in San Jose. Although he is still an IBM employee, the storage systems plant where he works was bought by Hitachi two years ago.

"High tech used to be a fast-growing, high profit margin industry. Now (its) profits are going away and it's stuck with an aging workforce," Kruse said.

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E-mail John Shinal at jshinal@sfchronicle.com