Indian IT Companies and US Crises – Will They Survive?

Everyone has one question in mind – what is the impact of US economical crises on Indian IT companies and Jobs. Though there will be reduction in the jobs and people may get fired, companies will be able to cop the problem and get strengthened over the time.

Most Indian IT companies gets a major portion of their revenue from US market. The BFSI (Banking, Finance, Service and Investment) sector is the major source of revenue for these IT companies like Infosys, Satyam, Wipro and TCS.

The sinking US economy will definitely have adverse effect on these companies. But this effect will take around one month to come into effect. Presently, companies have orders in hand and they are executing projects. But after one month, when payments will be due and there will be delay in payments, Indian IT cos. will come into crises.

US BFSI cos. which are not in a position to make payments for IT department, will start reducing the manpower from their projects. In this situation, Indian cos. will have burns on both sides. They will suffer shortage of funds and there were non-billable people sitting on the bench.

This will be an unhealthy situation. Companies will start firing people as they have to survive. There will be jobless people everywhere. I can see that the situation will be very much the same as that was in 2001-02.

But this will be a second lesson to Indian companies. In the last set-back most companies diversified their clients to Europe and Asia. This time these companies will find new markets. In the long run, this will reduce dependency on one geographical market making the companies more stable and recession-proof.

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