A downturn in worldwide economy, Satyam's fraud case and the terrorist attacks in Mumbai and supply chain and shipping cost issues in China are causing US technology companies to pull back from the two traditional outsourcing locations.
Citing these three global factors, an annual survey by BDO Seidman, LLP, one of America's leading accounting and consulting organizations, suggested several technology firms would choose US as future outsourcing location over India and China.
"While last year may have produced an outsourcing bubble, 2009 will see companies retrench to survive in the face of reduced demand. The US has become a far more viable option for them," said Douglas Sirotta, a Partner in BDO Seidman's Technology Practice.
"This year we are seeing three global factors that are causing US technology companies to pull back from traditional outsourcing locations, led by the recent boom and bust of the worldwide economy.
"Satyam's fraud case and the terrorist attacks in Mumbai are causing a lot of companies to reconsider operating in India. And supply chain and shipping cost issues in China are negatively impacting the attractiveness of outsourcing technology operations to the Far East."
Currently nearly two-thirds (62 per cent) of chief financial officers (CFOs) at leading US technology businesses say that their companies outsource services or manufacturing, it said.
However, the survey results point to a likely decline in international outsourcing in 2009: 22 percent say the United States is the outsourcing destination they are most likely to consider in 2009, compared to 16 per cent for China and 13 per cent for India. Another 19 per cent report no interest in additional outsourcing.
The survey conducted in January 2009 examines the opinions of 100 chief financial officers at leading technology companies located throughout the US. Other major findings:
Less than half (42 per cent) of the CFOs indicate that they have operations outside the US, compared to nearly double that amount (79 per cent) last year.
Nearly a third (29 per cent) of respondents say their primary concern regarding international growth is an uncertain business or political climate.
About a quarter (26 per cent), cite international business and tax regulations, with 21 per cent citing currency risk, 14 per cent intellectual property risk and exploitation, and 10 per cent training of international employees as their primary concern.
Currently the most common non-US locations for outsourcing are India (50 per cent), Southeast Asia, including the Philippines (31 per cent, down from 50 per cent in 2008), China (19 per cent, down from 46 per cent in 2008), and Western Europe (19 per cent).
For future outsourcing, the CFOs most frequently cite the United States (22 per cent), followed by China (16 per cent), India (13 per cent), Southeast Asia, including the Philippines (7 per cent), Latin America (7 per cent), Western Europe (6 per cent), Canada (5 per cent) and Eastern Europe (3 per cent).
Of those outsourcing, the most common functions being off-shored currently are: manufacturing (54 percent), IT services and programming (46 percent), research and development (35 percent), distribution (35 percent) and call centres (35 percent).
Agencies
Thursday, March 5, 2009
Will Microsoft layoff H-1B visa staff too?
Observing that the H-1B work visa programme helps hire the best available talent of the world, American software giant Microsoft has said H-1B visa holders has contributed significantly to its success. However, the company, which had recently announced to lay off some 5,000 jobs in the next 18 months, would be handing over pink slips to H-1B visa holders too.
Microsoft’s observation on H-1B visas and their significant contribution to its success was made by the company in a letter to senator Charles Grassley.
H1-B employees have always accounted for less than 15% of Microsoft’s US workforce, the level that is used in immigration law to determine whether a company is “H-1B dependent,” the letter said. The senator in a letter dated January 22 had sought information from Microsoft particularly about how its plan to fire 5,000 people would affect US workers and non-US citizens working for Microsoft. The Microsoft letter dated March 3 written by Bradford L Smith, its general counsel, has been posted on its website http://microsoftontheissues.com.
Agencies
Microsoft’s observation on H-1B visas and their significant contribution to its success was made by the company in a letter to senator Charles Grassley.
H1-B employees have always accounted for less than 15% of Microsoft’s US workforce, the level that is used in immigration law to determine whether a company is “H-1B dependent,” the letter said. The senator in a letter dated January 22 had sought information from Microsoft particularly about how its plan to fire 5,000 people would affect US workers and non-US citizens working for Microsoft. The Microsoft letter dated March 3 written by Bradford L Smith, its general counsel, has been posted on its website http://microsoftontheissues.com.
Agencies
Tuesday, March 3, 2009
Has Accenture sacked half Manila workforce?
US-based outsourcing firm Accenture is laying off almost half its workforce in the Philippine capital due to the effects of the global financial crisis, the Labour Department said.
Accenture Philippines has filed a notice of retrenchment for about 500 workers at its facilities in Manila, said Labour Undersecretary Rosalinda Baldoz.
Accenture, which engages in business process outsourcing, including call centres, had about a thousand workers in Manila and in March 2008 it opened an office in the central city of Cebu which employs about 500 people.
Call centres and other outsourced business processes have become a major industry in the Philippines. Industry leaders had previously predicted that the sector would not be affected by the global financial turmoil as companies in developed countries would outsource more of their functions abroad to save money during the crisis.
Agencies
Accenture Philippines has filed a notice of retrenchment for about 500 workers at its facilities in Manila, said Labour Undersecretary Rosalinda Baldoz.
Accenture, which engages in business process outsourcing, including call centres, had about a thousand workers in Manila and in March 2008 it opened an office in the central city of Cebu which employs about 500 people.
Call centres and other outsourced business processes have become a major industry in the Philippines. Industry leaders had previously predicted that the sector would not be affected by the global financial turmoil as companies in developed countries would outsource more of their functions abroad to save money during the crisis.
Agencies
Web Abuzz with news of attack on Sri Lankan Cricket Team
Within hours of attack on the Sri Lankan cricket team near the Gaddafi cricket stadium in Lahore, Pakistan, the web was loaded with videos, links and discussions
A few gunmen attacked the Sri Lankan cricket team near the Gaddafi cricket stadium in Lahore, Pakistan. This news broke out a few hours ago and got the social media enthusiasts active over the web along with the news media.
All media was affected -- starting with news channels like IBN Live streaming a live video about the news to the micro-blogging service Twitter which was the one heavily impacted with 140 character discussions.
This attack on Sri Lankan cricket team has become one of the trending topics on Twitter. Here are a few links which lead to Sri Lankan Cricket team related news and discussions on Twitter:
keyword: Sri Lankan
keyword: #srilanka
Few of the reactions on the micro-blogging site Twitter that were noted:
SuaveRepublique: Suave is wishing that the Sri Lankan Cricketers are OK, and that cricket is never played there again.
tajdaroc: HOW is it that the attckers were able to escape having been in plain sight? The access logistics are as simple as can be #SriLanka #Pakistan
CXOtoday
A few gunmen attacked the Sri Lankan cricket team near the Gaddafi cricket stadium in Lahore, Pakistan. This news broke out a few hours ago and got the social media enthusiasts active over the web along with the news media.
All media was affected -- starting with news channels like IBN Live streaming a live video about the news to the micro-blogging service Twitter which was the one heavily impacted with 140 character discussions.
This attack on Sri Lankan cricket team has become one of the trending topics on Twitter. Here are a few links which lead to Sri Lankan Cricket team related news and discussions on Twitter:
keyword: Sri Lankan
keyword: #srilanka
Few of the reactions on the micro-blogging site Twitter that were noted:
SuaveRepublique: Suave is wishing that the Sri Lankan Cricketers are OK, and that cricket is never played there again.
tajdaroc: HOW is it that the attckers were able to escape having been in plain sight? The access logistics are as simple as can be #SriLanka #Pakistan
CXOtoday
Is it business as usual at Satyam?
In his first overseas trip to reinforce Satyam's commitment, Satyam Computer Services' newly appointed Chief Executive Officer A.S. Murty today assured Singapore that "It's business as usual at Satyam".
Murty's trip underscored the company's ongoing commitment to Singapore, headquarters for its "Rest of the World" (RoW) operations, which include Asia-Pacific, the Middle East, India and Africa. The visit was also aimed at restoring stakeholders' confidence and ensuring business continuity in the republic where its business remains strong.
Murty also used his two-day visit to address key considerations about Satyam's operational and financial aspects. Since 2000, Singapore has been an integral part of the leading global consulting and information technology services provider's global growth strategy.
"Satyam's foundation in Singapore and the RoW region is still quite strong," Murty said. "Our customer base remains intact and all of our clients have chosen to stand by us during these challenging times. And, since the beginning of 2009, we have seen a record level of new contracts in the region, which shows the confidence our customers and the industry continue to have in us."
Assuring that Satyam has a promising future, Murty said the new Board represents some of the best management talent available and employee morale continues to be high.
"My immediate priority as CEO is to initiate and cultivate additional measures that will continue to stabilize Satyam and benefit all its stakeholders," Murty said. "Singapore plays a key role in those stabilization efforts, because it is the nerve centre of our efforts to grow our business in this critical region."
CXOtoday
Murty's trip underscored the company's ongoing commitment to Singapore, headquarters for its "Rest of the World" (RoW) operations, which include Asia-Pacific, the Middle East, India and Africa. The visit was also aimed at restoring stakeholders' confidence and ensuring business continuity in the republic where its business remains strong.
Murty also used his two-day visit to address key considerations about Satyam's operational and financial aspects. Since 2000, Singapore has been an integral part of the leading global consulting and information technology services provider's global growth strategy.
"Satyam's foundation in Singapore and the RoW region is still quite strong," Murty said. "Our customer base remains intact and all of our clients have chosen to stand by us during these challenging times. And, since the beginning of 2009, we have seen a record level of new contracts in the region, which shows the confidence our customers and the industry continue to have in us."
Assuring that Satyam has a promising future, Murty said the new Board represents some of the best management talent available and employee morale continues to be high.
"My immediate priority as CEO is to initiate and cultivate additional measures that will continue to stabilize Satyam and benefit all its stakeholders," Murty said. "Singapore plays a key role in those stabilization efforts, because it is the nerve centre of our efforts to grow our business in this critical region."
CXOtoday
Monday, March 2, 2009
Will HCL Tech layoff 450 employees?
IT services company HCL Technologies has asked 450 employees at its Delhi and Bangalore offices to leave. A majority of those axed were on the bench.
An HCL Technologies official, on the condition of anonymity, said that the company had sacked 400 people in Delhi and another 50 in Bangalore in the last one-two months. The firm had earlier asked those on the bench, the buffer of employees kept on the rolls for new projects, to get assigned to projects or face the prospect of being asked to leave the firm, he said.
In an email reply, a company spokeswoman didn’t comment on the number of people sacked by the company but indicated that the move was linked to the performance of employees.
“HCL follows a systematic process of performance review and development, and the expectation of the organisation is for employees to meet the stringent performance standards. This is a routine and ongoing process,” she said.
As of December 31, 2008, HCL had about 52,957 employees. The global downturn has impacted the revenues of clients of Indian IT companies, thereby dampening demand for software services.
Agencies
An HCL Technologies official, on the condition of anonymity, said that the company had sacked 400 people in Delhi and another 50 in Bangalore in the last one-two months. The firm had earlier asked those on the bench, the buffer of employees kept on the rolls for new projects, to get assigned to projects or face the prospect of being asked to leave the firm, he said.
In an email reply, a company spokeswoman didn’t comment on the number of people sacked by the company but indicated that the move was linked to the performance of employees.
“HCL follows a systematic process of performance review and development, and the expectation of the organisation is for employees to meet the stringent performance standards. This is a routine and ongoing process,” she said.
As of December 31, 2008, HCL had about 52,957 employees. The global downturn has impacted the revenues of clients of Indian IT companies, thereby dampening demand for software services.
Agencies
Infosys cuts five percent of Australia staff
Top IT firm Infosys Technologies is restructuring its Australian operations. This has created some redundancies, downsizing its workforce at Infosys Australia by around 5 per cent, a source briefed in the matter said.
The subsidiary employs 360 people, a majority of them from Expert Information Services -- the first acquisition Infosys Australia made six years ago.
Infosys board member and director for human resources Mohandas Pai confirmed that there were some separations from Infosys Australia. Responding to a mail, he said, “We have had an organisational restructuring in our Australia subsidiary and as a result, some positions have become redundant. It is the first time after the acquisition that this is being done.”
The tech leader has, however, promised that the laid-off employees would get assistance for outplacement as well as severance pay. A few months ago, Gary Ebeyan, who used to head Infosys Australia, quit the firm citing personal reasons. He was replaced by Jacqueline Korhonen, a former IBM executive. Revenues and profits of Infosys Australia have been slipping in the past three quarters of the fiscal in part due to the impact of the currency movements.
From a first quarter revenue of $34 million and a net income of $3 million, its second quarter revenue slipped to $30.84 million and net income to $2.8 million. In the third quarter, revenue fell further to $26 million and net income to $1.62 million.
“The Australian dollar is weakening significantly,” explained an analyst, who said Infosys could be laying off staff in other regions such as the UK as well. In Australia, Infosys’ largest customer is Telestra, he added.
Agencies
The subsidiary employs 360 people, a majority of them from Expert Information Services -- the first acquisition Infosys Australia made six years ago.
Infosys board member and director for human resources Mohandas Pai confirmed that there were some separations from Infosys Australia. Responding to a mail, he said, “We have had an organisational restructuring in our Australia subsidiary and as a result, some positions have become redundant. It is the first time after the acquisition that this is being done.”
The tech leader has, however, promised that the laid-off employees would get assistance for outplacement as well as severance pay. A few months ago, Gary Ebeyan, who used to head Infosys Australia, quit the firm citing personal reasons. He was replaced by Jacqueline Korhonen, a former IBM executive. Revenues and profits of Infosys Australia have been slipping in the past three quarters of the fiscal in part due to the impact of the currency movements.
From a first quarter revenue of $34 million and a net income of $3 million, its second quarter revenue slipped to $30.84 million and net income to $2.8 million. In the third quarter, revenue fell further to $26 million and net income to $1.62 million.
“The Australian dollar is weakening significantly,” explained an analyst, who said Infosys could be laying off staff in other regions such as the UK as well. In Australia, Infosys’ largest customer is Telestra, he added.
Agencies
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