India's outsourcing bubble is bursting

[OhioChick]

Sep 30, 2008 6:30:19 AM


Bangalore, India--Once a high-flying tech hub, Bangalore is seeing more sober days in the wake of the credit crisis.

It looks like the global economic turmoil and the dramatic Wall Street meltdown is beginning to hit Bangalore.

Until recently, in India's outsourcing hub it used to be one big Googlefest, with all the pampering and cosseting that employees enjoy at the company's Googleplex headquarters in Silicon Valley. I don't know what the latest from Googleplex is. But in Bangalore, it sure looks like the party is slowing down.

The first sign is in real estate. In a city where residential communities like Silver Manor, Golden Enclave and Platinum City sprouted to house thousands of young, upwardly mobile technology workers, instead of 200 million-rupee homes, developers are now beginning to market 2 million-rupee condominiums.

Departmental stores sport 'sale' signs every other week as credit-card-happy tech workers are cooling off consumption. In India's top management schools, including the Bangalore branch of the Indian Institute of Management, technology outsourcing firms, multinationals and Wall Street banks used to slug it out for Day Zero spots during Placement Week. For students in the graduating class, that exercise is months away. But the schools are already planning to offset an expected slowdown in placements by inviting more companies.

The collapse of top US financial firms will cause a dramatic slowdown in hiring among outsourcing companies. The banking, financial services and insurance sectors account for 40 per cent of revenues for India's $52 billion outsourcing industry (as of 2007-2008).

Firms such as now-bankrupt Lehman Brothers and bought-out Merrill Lynch were big customers and provided millions of dollars worth of lucrative contracts to Indian technology services companies.

Consequently, in the past home-grown Indian outsourcing companies grew by impressive numbers. Infosys and Wipro, the big two employers in Bangalore, were each hiring 10,000 employees or more during recent years. Such spectacular ramp-ups are unlikely to recur any time soon. One large call centre with European and US customers is now refusing to hire anybody that does not stay within a five-mile radius of their centers: the costs are just too high.

For tech employees, jobs no longer come with a lifetime guarantee. Companies are shedding people in small numbers and keeping their actions under the radar. The dreaded pink slips have arrived in Bangalore.

http://news.zdnet.com/2424-9595_22-238208.html

:nopity:
Welcome to my world.

[nebenaube]

1. yea!!

Now maybe Sprint's billing software can be properly fixed.

[Justyce]

2. My entire division was pink-slipped and sent to India, so

I have a hard time mustering up any pity.

[ihavenobias]

4. Ouch n/t

[AndyA]

3. I feel bad for people who are losing their jobs, but I'm sick of talking to people

on the phone who can't understand me, and I can't understand them!

Is it too much to expect that when you pick up the phone and call a company's customer service that the person who answers your call can speak the same language, and enunciate words well enough to be comprehended?

[jberryhill]

6. Si, y yo tambien /nt

[Hydra]

5. Poor them

:sarcasm:

They danced on our graves when times were good. They can join us at the funeral we've been at in the meantime.

Who thought outsourcing was a good idea, again?

[populistdriven]

7. Welcome to my world.

[ashleigh4dem]

8. I agree with Hydra

[Oldtimeralso]

9. TO BAD SO SAD

My wife lost her job after 24 years in a call center due to outsourcing.

[Waiting For Everyman]

10. Now we see how to kill the beast.

Squeeze the excess profits out of it... the overcharging they are gouging all of us with.