Though the world is witnessing a severe meltdown, IT firms in India found it an opportunity to step up their outsourcing activities as global companies are resorting to several cost cutting initiatives. It is despite the fact that the country is facing serious threats to its outsourcing leadership from a few internal elements like vulnerabilities to terror attacks and erosion of the confidence in corporate governance.
However India will remain a major outsourcing destination. "Even though other markets will be redoubling efforts to seize opportunities from India, no other country yet presents a serious threat as a key outsourcing destination", said Arno Franz, Partner and Asia-Pacific President at TPI, while speaking to BusinessWeek. "China is still very much an emerging destination, while it is debatable whether any other single country has the breadth and depth of skills, experience and infrastructure to seriously challenge India's position," he added.
Franz pointed out that India-based providers made significant market share increases last year. In terms of total contract value (TCV), Indian outsourcers contributed 16 percent of the global market, up from 11 percent in 2007. They also accounted for over half of the Asia-Pacific outsourcing TCV. Moreover, two out of the three mega-deals in the second half of 2008 went to India-based providers. Mega deals, defined by TPI as contracts worth over $1 billion, numbered 12 between January and June last year.
Over the year, there was a record of 88 contracts in the region with a total contract value of over US$25 million, 50 of which were awarded in the second half. Despite the high number, the 2008 TCV of Asia-Pacific outsourcing deals was $12.3 billion, lower than 2007's $12.7 billion. Annualized contract value (ACV), which is the contract value divided by its duration, also fell from $2.7 billion in 2007, to $2.4 billion last year.
Agencies
Wednesday, February 11, 2009
Intel invests big in US; Just as others cut costs
Chip giant Intel is swimming against the tide. At a time when most of the companies are cutting back on their expenses in the U.S., Intel is investing massively in that country. The company on February 10 announced plans to invest $7 billion over the next two years to expand and transform three U.S. manufacturing plants. With this initiative, Intel aims to outpace rival Advanced Micro Devices (AMD) in its core PC business, reported BusinessWeek.
The company plans to begin shipping in volume the world's first microprocessors created at the atomic 32-nanometer level-transistors so small that 4 million of them could fit on the period at the end of this sentence, as early as this fall. Intel plans to begin retooling chipmaking plants in Arizona, New Mexico, and Oregon, where a total of 7,000 people will be employed.
By shifting to a more efficient manufacturing process, Intel hopes to sell chips to consumer electronics, cell phones, and other Internet-connected devices. Such chips could substantially lower development costs for Nokia (NOK), Samsung, Sony (SNE), and other manufacturers struggling to outdo each other with cutting-edge TVs, phones, and other devices.
"We're investing in America to keep Intel and our nation at the forefront of innovation," said Intel CEO Paul S. Otellini. "The chips that the new fabs produce will become the basic building blocks of the digital world, generating economic returns far beyond our industry," he added.
Intel executives had been signaling for weeks that the chipmaker remained on track to spend $5.2 billion, or roughly the same as it spent on capital improvements in 2008, to move to the 32-nanometer manufacturing process.
Agencies
The company plans to begin shipping in volume the world's first microprocessors created at the atomic 32-nanometer level-transistors so small that 4 million of them could fit on the period at the end of this sentence, as early as this fall. Intel plans to begin retooling chipmaking plants in Arizona, New Mexico, and Oregon, where a total of 7,000 people will be employed.
By shifting to a more efficient manufacturing process, Intel hopes to sell chips to consumer electronics, cell phones, and other Internet-connected devices. Such chips could substantially lower development costs for Nokia (NOK), Samsung, Sony (SNE), and other manufacturers struggling to outdo each other with cutting-edge TVs, phones, and other devices.
"We're investing in America to keep Intel and our nation at the forefront of innovation," said Intel CEO Paul S. Otellini. "The chips that the new fabs produce will become the basic building blocks of the digital world, generating economic returns far beyond our industry," he added.
Intel executives had been signaling for weeks that the chipmaker remained on track to spend $5.2 billion, or roughly the same as it spent on capital improvements in 2008, to move to the 32-nanometer manufacturing process.
Agencies
Tuesday, February 10, 2009
US Financial bailout may top $1 trillion
The Obama administration said Tuesday its new plan for rescuing America's crippled banking and financial sectors could top $1 trillion in a complex formula of cash infusions from government and the private sector.
Treasury Secretary Timothy Geithner revealed the massive rescue effort just hours after President Barack Obama said at his first White House news conference that Congress risked turning ``a crisis into a catastrophe'' if it fails to approve a separate $800-plus billion economic stimulus program. The plan has faced stiff opposition from Republican lawmakers.
The new financial bailout plan brought forward by Geithner grows out of a $700 billion rescue program put in place in October, under the Bush administration, as the depth of the country's critical financial sector troubles surfaced with a collapse of the housing market.
``Right now critical parts of our financial system are damaged,'' Geithner said in unveiling the new plan. ``Instead of catalyzing recovery, the financial system is working against recovery and that's the dangerous dynamic we need to change.''
Half of the bailout money was allocated by former President George W. Bush's administration, but that spending has come under heavy criticism for a lack of transparency and the failure of banks to put the money into the frozen credit market.
The second half of the $700 billion is now in the hands of the Obama administration, which plans to greatly expand the effort to unclog credit markets that provide loans to consumers and businesses. Funding for this effort would see a huge increase from $20 billion up to $100 billion, according to administration officials.
If a total of $100 billion from the bailout fund was used, it would be enough to support an additional $1 trillion in lending support through a Federal Reserve program that was announced in November but has yet to begin operations.
The administration also announced that the program would be expanded beyond consumer and small business loans to provide aid to the troubled commercial real estate sector.
The administration also announced a program to create a partnership between the government and the private sector to get private investors to buy bad assets that are currently weighing down the balance sheets of banks. Congressional aides who were briefed on this plan said that Treasury officials said it could involve between $250 billion and $500 billion in government support.
As Geithner put forward the new bailout package, the Senate, despite nearly unanimous Republican opposition, was expected to approve a $838 billion stimulus bill later Tuesday. Senate approval would set the stage for possibly contentious negotiations with the House on a final compromise on legislation. Congressional leaders hope to get the bill to Obama's desk in a few days.
Obama defended the stimulus plan in his press conference Monday night, saying the federal government ``is the only entity left with the resources to jolt our economy back to life.''
``The plan is not perfect,'' the president said. ``No plan is. I can't tell you for sure that everything in this plan will work exactly as we hope, but I can tell you with complete confidence that a failure to act will only deepen this crisis as well as the pain felt by millions of Americans.''
Obama goes to Fort Myers, Florida, a metropolitan area among the hardest-hit by mortgage foreclosures, for another town-hall meeting Tuesday like the one he held Monday in Elkhart, Indiana, to promote his economic plan.
Just three weeks after his inauguration was celebrated jubilantly around the world, Obama has run into the jarring difficulties of governing. He failed to win over the Republicans he courted for his economic plan. Some of his supporters have wondered if he has yielded too much ground in the pursuit of bipartisanship.
Yet Obama's approval ratings remain high — 67 per cent according to a Gallup Organization poll released Monday. He is trying to tap into that popularity to win public and congressional support for his economic recovery plan as the country faces its worst economic crisis in 80 years.
``This is not your ordinary, run-of-the-mill recession,'' Obama said in his address Monday night, issuing a dire warning of the consequences if Congress fails to agree on a stimulus package. He cited Japan's failure to take bold actions in time to reverse a recession that turned the 1990s into a ``lost decade'' with no economic growth.
Despite painting a dire picture of the American economy, Obama said the US could well be in better shape by next year, as measured by increased hiring, lending, home values and other factors.
``If we get things right, then, starting next year, we can start seeing significant improvement,'' Obama said.
Agencies
Treasury Secretary Timothy Geithner revealed the massive rescue effort just hours after President Barack Obama said at his first White House news conference that Congress risked turning ``a crisis into a catastrophe'' if it fails to approve a separate $800-plus billion economic stimulus program. The plan has faced stiff opposition from Republican lawmakers.
The new financial bailout plan brought forward by Geithner grows out of a $700 billion rescue program put in place in October, under the Bush administration, as the depth of the country's critical financial sector troubles surfaced with a collapse of the housing market.
``Right now critical parts of our financial system are damaged,'' Geithner said in unveiling the new plan. ``Instead of catalyzing recovery, the financial system is working against recovery and that's the dangerous dynamic we need to change.''
Half of the bailout money was allocated by former President George W. Bush's administration, but that spending has come under heavy criticism for a lack of transparency and the failure of banks to put the money into the frozen credit market.
The second half of the $700 billion is now in the hands of the Obama administration, which plans to greatly expand the effort to unclog credit markets that provide loans to consumers and businesses. Funding for this effort would see a huge increase from $20 billion up to $100 billion, according to administration officials.
If a total of $100 billion from the bailout fund was used, it would be enough to support an additional $1 trillion in lending support through a Federal Reserve program that was announced in November but has yet to begin operations.
The administration also announced that the program would be expanded beyond consumer and small business loans to provide aid to the troubled commercial real estate sector.
The administration also announced a program to create a partnership between the government and the private sector to get private investors to buy bad assets that are currently weighing down the balance sheets of banks. Congressional aides who were briefed on this plan said that Treasury officials said it could involve between $250 billion and $500 billion in government support.
As Geithner put forward the new bailout package, the Senate, despite nearly unanimous Republican opposition, was expected to approve a $838 billion stimulus bill later Tuesday. Senate approval would set the stage for possibly contentious negotiations with the House on a final compromise on legislation. Congressional leaders hope to get the bill to Obama's desk in a few days.
Obama defended the stimulus plan in his press conference Monday night, saying the federal government ``is the only entity left with the resources to jolt our economy back to life.''
``The plan is not perfect,'' the president said. ``No plan is. I can't tell you for sure that everything in this plan will work exactly as we hope, but I can tell you with complete confidence that a failure to act will only deepen this crisis as well as the pain felt by millions of Americans.''
Obama goes to Fort Myers, Florida, a metropolitan area among the hardest-hit by mortgage foreclosures, for another town-hall meeting Tuesday like the one he held Monday in Elkhart, Indiana, to promote his economic plan.
Just three weeks after his inauguration was celebrated jubilantly around the world, Obama has run into the jarring difficulties of governing. He failed to win over the Republicans he courted for his economic plan. Some of his supporters have wondered if he has yielded too much ground in the pursuit of bipartisanship.
Yet Obama's approval ratings remain high — 67 per cent according to a Gallup Organization poll released Monday. He is trying to tap into that popularity to win public and congressional support for his economic recovery plan as the country faces its worst economic crisis in 80 years.
``This is not your ordinary, run-of-the-mill recession,'' Obama said in his address Monday night, issuing a dire warning of the consequences if Congress fails to agree on a stimulus package. He cited Japan's failure to take bold actions in time to reverse a recession that turned the 1990s into a ``lost decade'' with no economic growth.
Despite painting a dire picture of the American economy, Obama said the US could well be in better shape by next year, as measured by increased hiring, lending, home values and other factors.
``If we get things right, then, starting next year, we can start seeing significant improvement,'' Obama said.
Agencies
GM to cut 10,00 salaried jobs
General Motors says it's cutting 10,000 salaried jobs, blaming the need to restructure the company amid the continued drop in new vehicle sales.
The Detroit-based automaker says it will reduce its total number of salaried workers to 63,000 from 73,000 this year. About 3,400 of GM's 29,500 salaried US jobs are expected to be eliminated.
The job cuts are part of the restructuring plan GM submitted to Congress late last year. Most of the cuts are expected to take place by May 1.
GM says the cuts will vary by global regions depending on staffing levels and market conditions.
GM also is cutting the pay of most of its salaried U.S. workers beginning May 1 and continuing at least through the end of the year.
Agencies
The Detroit-based automaker says it will reduce its total number of salaried workers to 63,000 from 73,000 this year. About 3,400 of GM's 29,500 salaried US jobs are expected to be eliminated.
The job cuts are part of the restructuring plan GM submitted to Congress late last year. Most of the cuts are expected to take place by May 1.
GM says the cuts will vary by global regions depending on staffing levels and market conditions.
GM also is cutting the pay of most of its salaried U.S. workers beginning May 1 and continuing at least through the end of the year.
Agencies
Airlines raise fares by at least Rs 2,000
Airlines including low-cost carriers have withdrawn all promotional fares and increased basic fares by around Rs.2,000 on several sectors from Tuesday.
The decision was taken as operators were faced with low load factors, though basic promotional fares had been as low as Rs.99 on many routes, industry sources said.
"We have discontinued our promotional fares as the response has not been very good, but people who have already bought tickets under the scheme will enjoy the benefit," said an Air India spokesperson here.
The spokesperson of private carrier Kingfisher Airlines said: "We have closed low fare buckets and are concentrating on setting higher fare buckets. Our focus is on revenue and not seat factors."
Agencies
The decision was taken as operators were faced with low load factors, though basic promotional fares had been as low as Rs.99 on many routes, industry sources said.
"We have discontinued our promotional fares as the response has not been very good, but people who have already bought tickets under the scheme will enjoy the benefit," said an Air India spokesperson here.
The spokesperson of private carrier Kingfisher Airlines said: "We have closed low fare buckets and are concentrating on setting higher fare buckets. Our focus is on revenue and not seat factors."
Agencies
One in four US companies plan salary freeze
About a quarter of businesses in America have frozen workers' salaries for 2009 in the wake of a pessimistic economic outlook, according to a new survey.
Outsourcing and consulting firm Mercer in a survey released Monday said 25 percent of organizations surveyed said they have already decided not to raise their employees' pay, and another 20 percent are considering a salary freeze this year.
A year ago, just 5 percent of companies planned to suspend raises for their staff. Mercer predicted that one in three companies will have frozen wages at 2008 levels by the end of 2009.
"It's not an easy message to communicate to employees, but we think managers will be aided by the unprecedented context of these difficult decisions - including low inflation and high unemployment," said Steve Gross of Mercer.
Those companies that plan on offering raises to their employees will give smaller-than-expected pay increases, Mercer said. The average expected salary bump at those businesses was just 3.2 percent, down from a planned 3.6 percent according to an October study.
The news comes as many employers are opting to slash jobs rather than reduce or freeze pay. Announced layoffs so far this year have already topped 300,000, and the Labour Department reported Friday that employers slashed 598,000 jobs in January - the single highest monthly job-loss total since December 1974.
Mercer also reported that executives are far less likely to get a salary increase than other employees in 2009. According to the survey, just 61 percent of companies are planning to raise their executives' pay, and 77 percent of respondents plan to decrease the level of executive compensation from their October projections.
Only 69 percent of employers plan to raise salaries for employees in managerial positions.
"Given lacklustre corporate performance and recent pressure from regulators, shareholders and the president (Barack Obama), it's not surprising to see that over the past few months, more than one-third of participants who reported executive salary data went from a 2009 planned base-salary increase for their executives to a freeze," said Gross.
Agencies
Outsourcing and consulting firm Mercer in a survey released Monday said 25 percent of organizations surveyed said they have already decided not to raise their employees' pay, and another 20 percent are considering a salary freeze this year.
A year ago, just 5 percent of companies planned to suspend raises for their staff. Mercer predicted that one in three companies will have frozen wages at 2008 levels by the end of 2009.
"It's not an easy message to communicate to employees, but we think managers will be aided by the unprecedented context of these difficult decisions - including low inflation and high unemployment," said Steve Gross of Mercer.
Those companies that plan on offering raises to their employees will give smaller-than-expected pay increases, Mercer said. The average expected salary bump at those businesses was just 3.2 percent, down from a planned 3.6 percent according to an October study.
The news comes as many employers are opting to slash jobs rather than reduce or freeze pay. Announced layoffs so far this year have already topped 300,000, and the Labour Department reported Friday that employers slashed 598,000 jobs in January - the single highest monthly job-loss total since December 1974.
Mercer also reported that executives are far less likely to get a salary increase than other employees in 2009. According to the survey, just 61 percent of companies are planning to raise their executives' pay, and 77 percent of respondents plan to decrease the level of executive compensation from their October projections.
Only 69 percent of employers plan to raise salaries for employees in managerial positions.
"Given lacklustre corporate performance and recent pressure from regulators, shareholders and the president (Barack Obama), it's not surprising to see that over the past few months, more than one-third of participants who reported executive salary data went from a 2009 planned base-salary increase for their executives to a freeze," said Gross.
Agencies
Has China overtakes US as largest auto market?
China overtook the United States as the largest auto market in the world in January, according to data published by Chinese state media on Tuesday.
A total of 735,000 automobiles were sold in China last month, state television said, citing Dong Yang, deputy director of the China Association of Automobile Manufacturers.
By contrast, 656,976 vehicles were sold last month in the United States, according to preliminary estimates issued last week by market research firm Autodata.
Agencies
A total of 735,000 automobiles were sold in China last month, state television said, citing Dong Yang, deputy director of the China Association of Automobile Manufacturers.
By contrast, 656,976 vehicles were sold last month in the United States, according to preliminary estimates issued last week by market research firm Autodata.
Agencies
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