Most of the outsourcing business in the world comes from the US. The slowdown of the financial and economic sector of US affects enormously in the world especially in India because over 50% of the US share goes to the Indian software and outsourcing markets. The impact on this slowdown affects IT and ITES firms more.
The slowdown of US financial and economic sector is a prolonged one. Structural readjustments are the main reason for slowing down the financial and economy sector of US while economic scenario of the global is caused through changing the currency and financial market fundamentals. The implications are significant for all the sectors of India which are linked on it. The strongest impact would be affected on the sector of IT and ITES.
The downtrends may lose out the companies that yet haven’t show the performance. For example, if an US firm has 20 vendors today, out of them 15 are located in India; the firm may fancy deducting the number to 11 or 12. So, many employees become jobless. Moreover the budget will be decreased about 15% by US clients.
The economic crisis of US is structural and therefore in long term and the trend of low-cost off-shoring will increase.
Indian IT-ITES companies, which are also, rationalize of labor-cost by getting rid of unused labor and employment policies tightening. There has been a focus on increasing the leverage sharply at off-shore in projects to get better profitability.
The talent pool of India is getting richer and only a matter of time, the Indian IT-ITES industry overcomes the slowdown glitch of US.
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