Has recession reduced offshoring in UK ?
Date: June 3rd, 2009
Recent article in Financial Times (LINK) talks about that there has been a drop in offshoring activities from the UK. With the current economic crisis the amount of firms looking for offshoring has reduced significantly from the UK.
The reason is that capital expenditure required to kick start offshoring has reduced forcing firms to revisit their decision around offshoring. That and the fact that offshoring cost arbitrage has come done.
Though the volume has come down for offshoring, it is interesting to see some recent deals in the marketplace , specially in the UK where public sector firms have offshored more work recently offshore.
For new deals there is a slow down, but for existing deals, where the capital expenditure requirement is not high, those deals still continue to grow, although at a slower pace.
At a time when outsourcing firms are looking to shift focus from the US and grow in Europe and domestic (Indian) markets this makes it tougher for the firms to compete.
