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Outsourcing Industry News Weekly Recap: October 25 – November 1, 2011

One of the cons of outsourcing is that companies may not be earning stability and value in terms of infrastructure, internal knowledge, and personnel. This could lead to layoffs if the agreement with a provider has been severed.

In spite of this, the industry of outsourcing continues to grow by leaps and bounds across the world. These are the latest developments for this week.

India Loses Jobs as American Call Centers Leave and Search for Cheaper Alternatives

India has recently increased their business and labor costs, forcing American companies to pack up their call centers and look for less expensive alternatives in other countries.

A number of Indian businesses tried to make up for this by switching to back-office work, such as education, accounting, marketing process outsourcing, or hiring cheaper employees who live in tiny Indian areas.

However, based on the data from the National Association of Software and Service Companies, India had set up 13 call centers in the Philippines and have been hiring and training local employees for three years now.

Senior Vice President of the association, Sangeeta Gupta stated that, “The growth in the Philippines is also being driven, to a large extent, by Indian outsourcing companies that are setting up operations there.”

India still has a grip on back-office work, but may lose a majority of it to the Philippines if the trends continue. On the other hand, the United States lost many jobs for less expensive labor; but eventually got them back when they lowered labor costs.

Aviva Employees Waiting for Layoff News

The British-owned insurance company Aviva is expected to announce the job cuts that will take place due to cost-cutting and labor-intensive restructuring.

Workers of the said firm have been requested to attend meetings, and are worried that a possible thousand employees will be affected by outsourced positions and layoffs.

The staff at the Cork and Galway regional offices, as well as the company’s main office in Dublin, will be briefed as soon as the management is finished with their deliberations.

The current speculation is that Aviva will reduce their manpower by 50% through outsourcing and redundancies, and the sectors of life and general insurance will greatly be affected.

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