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October 7, 2008 | 
The credit crisis in the US has far-reaching effects that are being experienced around the world, especially in the fields of business, technology, labor and outsourcing.
The US economic slowdown’s effect on the domestic technology sector is now showing. Though mass-spread job cuts have not been seen, its threat hangs overheard for many as a decreasing demand for computers and other electronics may already be slashing some payrolls.
US employers have slashed payrolls by 159,000 in September, a high value in recent times. Many of these payroll cuts were for jobs in manufacturing, construction, retail and financial services.
According to the US Labor Department, there has not been an increase in work force numbers for computer and electronics manufacturers when monthly job hiring that employ thousands are the norm.
On the other hand, telecommunications companies cut 3,400 jobs this September.
eBay, the dominant online auction player and pioneer, just recently announced it will cut 1000 jobs or 10% of eBay’s workforce. This due to significant market losses as consumers are presently wary and fearful when it comes to spending and purchases, influenced no doubt by the sluggish US economy.
A somewhat similar situation can be seen in the Asia-Pacific though it is anticipated that most companies and businesses will not engage in any mass lay-offs but will only curb the dampen-down stimulus of the global financial crisis by halting employee recruitment and reduced pay.
Based on the Watson Wyatt survey that was conducted from April to June and covered a total of 1,389 companies in 37 countries, 84 percent of companies in the Asia-Pacific were anticipating a global economic downturn and have prepared contingency measures. This is a high percentage compared to their US counterparts (67 percent).
The BPO industry and IT sector in India have been hit by the Wall Street crisis and now the bruise is beginning to show.
Captive facilities, established by US financial giants that do no longer exist, are looking no better than unwanted orphans. Without any business nor customers to sustain their operations, these captive facilities are deemed of no value.
Despite they are also affected by the challenges facing many of their financial services customers, India’s IT outsourcing companies have reported that none of the existing projects they have been greatly affected so far and they are buffering any possible impact by redeploying employees to projects in telecommunications and manufacturing which are still seeing progressive growth.
Outsourcing Solutions, Inc. – your outsourcing partner!References:
- “Labour report indicates squeeze on tech sector.” 4 October 2008. The Economic Times of India. Accessed 7 October 2008. Link here
- Liu, K.J. “Layoffs not the first choice for Asia-Pacific firms.” 7 October 2008. Business World. Accessed 7 October 2008. Link here
- Meisner, Jeff. “eBay Bites Bullet, Jettisons 1,000 Jobs”. 6 October 2008. E-Commerce Times. Accessed 7 October 2008. Link here
- Shivapriya, N. “Crash of financial powerhouses puts question mark over captive BPOs.” 7 October 2008. E-Commerce Times. Accessed 7 October 2008. Link here
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