ndian Suppliers Smarting Under Recessionary Pressures Have Reduced Hiring Compared To Last Year
THE financial crisis has slowed down outsourcing in the banking and financial services sector in the short-term but it is likely to recover in early 2009, as per a report by a sourcing advisory firm.
As per the report, Market Vista: Q3 2008, by Everest Research Institute, outsourcing deals worth $3.2 billion (in annualised contract value) were signed between July and September, or in the third quarter, this year. About 480 outsourcing transactions were signed in the period, 15% more than the previous quarter. Banking, financial services and insurance firms signed 81 transactions, against 54 in Q2 this year.
Everest Research Institute managing principal Eric Simonson said a slowdown is emerging among financial services firms due to delays in initiatives and the managements’ keen focus on the economic crisis. “In the medium-term, restructuring, integration, and redefinition of sourcing strategies by large financial firms will lead to an increase in project-based work for suppliers and increased pressure on captives,” he said.
The report noted that Indian suppliers are experiencing slowdown pressures and have reduced hiring compared to last year. Infosys Technologies, India’s second-largest IT services firm by sales, is on track to hire 25,000 people this year, 8,000 less than last year. Fourth-largest Satyam Computer Services recently trimmed hiring plans to 8,000-10,000, against 14,000-15,000 earlier.
In the July-September quarter, outsourcing activity in Europe grew 10%. The report noted that Central American countries, especially Guatemala, El Salvador, Panama and Costa Rica, are taking active measures to improve their nearshore proposition for outsourcing.
Captives continued to see momentum, with about 24 new ones coming on board during the third quarter.
• Infosys Technologies is going to hire 25,000 people this year, 8,000 less than last year
• Satyam Computer Services recently trimmed hiring plans to 8,000-10,000, against 14,000-15,000 earlier
• In the July-Sept, outsourcing in Europe grew 10%