The Signs can be seen all over the world. The employment in United States fell for the first time. The effect of US recession can be seen on outsourcing Industry. IT Jobs falls by a relatively high percentage.
The current scenario says that purchasers will look to Vendors in order to help them in savings and also the productivity. Since Indian currency gained a lot against dollar since January to December ’07, resulting in Higher costs on the client side with lower earning for offshore providers.
Currency exchange rate risk can also be managed by sellers by using hedging of course as an option but it add more cost to the bottom-lines and add more pleasure as well. In India wages are increasing and also the IT companies in India are planning to reduce salary Increments given to employees in order to control the cost.
From last few years, Indian IT industry has focused on the US as it accounts more than 60 percent of total IT spending. However spending in IT industries in US is still going through the tough phase, so further growth seems to be limited. Taking all these aspects in mind Indian IT industries needs to focus their attention on the other markets especially Europe.