US economic and unemployment woes make Indian top tech firms nervous

7 Jun, 2011, 06.58AM IST, Shruti Sabharwal & Pankaj Mishra,ET Bureau

BANGALORE: Early signs of a potential slowdown in the US, marked by high unemployment and weakening consumer demand, is causing anxiety among India .s top tech firms deriving more than half of their business from the world's biggest market for software outsourcing.

Concerns of worsening macro-economic factors including falling housing prices can delay new technology investments by American firms, force outsourcing customers to renegotiate lower billing rates for software projects and could eventually affect the growth forecast for India's $70 billion IT sector if a recession takes shape, experts and company officials say. In an ET poll among five of the top 10 biggest Indian tech firms conducted over past week, two CEOs raised concerns while the remaining three said they remained cautious about a potential double dip.

"There are concerns of Greece defaulting. Some estimate this to be 50%. No one will be able to predict the repercussion if this happens. Last time, when Lehman failed, it triggered the economic recession," said S 'Kris' Gopalakrishnan, CEO of Infosys, India's second biggest software exporter.

Over past two years, companies across sectors in the US improved profitability by cutting down costs and trimming their payroll. Now, as demand created by the 'government stimulus' tapers off and unemployment climbs back to 9.1%-levels, concerns of another recession loom large.


More: http://economictimes.indiatimes.com/tech/ites/us-economic-and-unemployment-woes-make-indian-top-tech-firms-nervous/articleshow/8755138.cms

:nopity:

:rofl:

on a foreign economy that is on the edge of imploding. India's economy will fail before the US economy does because they have relied heavily on BPOs to fast track wealth without becoming self-sufficient, first.

Ashes, ashes, we all fall down.

had one of them call me the other night, looking for one of my (laid-off) coworkers to get them out of an extreme jam - I told the guy, YOU HAVE HIS JOB NOW. GOOD LUCK. :rofl: