US, European firms sell back-offices in India to cut costs: Report
With recession impacting biz, a host of cos in US and Europe have sold off their back offices in India to reduce costs. Dealing with salary cuts I Coping with recession
By PTI |
NEW YORK: With recession impacting their businesses, a host of companies in the US and Europe have sold off their back office facilities in India, in a move to reduce costs, a report says.
According to the Wall Street Journal in a report published online, "many western companies that opened centers in India to perform back office tasks on the cheap (at a low cost) have recently sold or closed those facilities, reversing a decade-long trend as companies look to slash costs and eliminate headaches during the recession."
Citigroup Inc and insurance firms AXA SA and Aviva PLC, among others, have sold offshore computer-programming shops and other operations to companies in India over the past year, the report stated.
Some companies have received hundreds of millions of dollars for their centers, while others have sold their sites for the cost of the equipment and usually the buyer gets a multi year contract to provide the same services back to the seller, it added.
Other firms, including Delta Air Lines Inc and UAL Corp, have shut down centers in India during the past few months.
The move reverses decade-long trend of companies in the US and UK and other developed countries of outsourcing their back-office jobs to India due to low labour cost.
Atleast 500 western firms have such centers in India, as per estimates by many research firms.
According to the Wall Street Journal in a report published online, "many western companies that opened centers in India to perform back office tasks on the cheap (at a low cost) have recently sold or closed those facilities, reversing a decade-long trend as companies look to slash costs and eliminate headaches during the recession."
Citigroup Inc and insurance firms AXA SA and Aviva PLC, among others, have sold offshore computer-programming shops and other operations to companies in India over the past year, the report stated.
Some companies have received hundreds of millions of dollars for their centers, while others have sold their sites for the cost of the equipment and usually the buyer gets a multi year contract to provide the same services back to the seller, it added.
Other firms, including Delta Air Lines Inc and UAL Corp, have shut down centers in India during the past few months.
ADVERTISEMENT
The move reverses decade-long trend of companies in the US and UK and other developed countries of outsourcing their back-office jobs to India due to low labour cost.
Atleast 500 western firms have such centers in India, as per estimates by many research firms.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
