US slowdown hits campus recruitment from Tier-II cities

The slowdown in the US has impacted campus recruitments in tier-II cities as well. According to representatives from engineering colleges, IT companies are now staying away from the campuses, which has resulted in an over 80 per cent drop in placements.

With the situation unlikely to improve in the near future, institutions are now advising students to join ITeS companies. "It is better to work somewhere instead of sitting idle," said a senior representative of a business school in Chennai. His college did not see even a single company visiting the campus for placements this year.

Meanwhile, Lakshmi Narayanan, vice-chairman, Cognizant Technology Solutions, said the current trend would be temporary.

According to a senior industry representative, the slower hiring this year was a consequence of last year's experience when many IT companies, hit by the weak dollar, had to delay absorbing students whom they had selected in advance.

K Pandia Rajan, MD of Ma Foi Management, had earlier said campus recruitments by IT companies would plummet about 38 per cent this year.

Source:
Rediff

1,59,000 jobs lost in US in a month

As many as 1,59,000 jobs were cut in the US in September, the worst ever retrenchment in a month for five years, the government has reported, heightening fears that the economic downturn was worsening and could persist well into next year.

Source:
Sify

Banking Impact on IT

The Indian IT and BPO companies could have more trouble coming their way following the collapse of the sixth largest bank in the United States. With Wachovia becoming the latest victim of the sub-prime crisis and Citigroup acquiring the company, there are doubts about how this deal could impact the Indian vendors.

A report published in the Hindu Businessline said vendors like Infosys, Genpact and Cognizant have had Wachovia on their client list since 2005 while they also have Citigroup on their rolls. How the latter views the outsourcing deals post buyout would be a matter of crucial concern.

The newspaper said that while Infosys and Cognizant refused comment, Genpact CEO Pramod Bhasin claimed that it was too early to analyse implications of the acquisition. "We will wait and watch and continue with our business normally," Bhasin was quoted as saying by Businessline.

The paper also quoted analysts as saying that there will be no major impact till the integration is done. “Unlike the direct impact of Lehman Brothers, the effect of this deal will be a couple of quarters away for the Indian vendors,” said Mr S. Sabyasachi, research director at neoIT.

Analysts believe that the future of Wachovia’s engagement with Indian vendors will be driven by Citi’s outsourcing strategy though at a general level they believe that the turmoil could see a 15-20 per cent reduction in IT budgets of all financial institutions over the next two to three years.

Source:
BPO Watch

IT firms fish for overseas acquisitions

The banking turmoil in the US and UK is gnawing away at the growth of Indian IT firms. Yet, domestic IT firms are expected to make at least six to eight more acquistions, similar to the bid for Axon by Infosys Technologies and HCL Technologies, over the next 12 months as they try to shore up their top lines in a bid to meet their revenue guidance.

For instance, more than half of the 11 IT companies that provide full-year revenue guidance run the risk of missing their numbers (in dollars) this year, according to Credit Suisse analysts. Their new estimates are now at the lower end of guidance for Infosys and Satyam and below guidance for MindTree. Among the large caps, they say that HCL Tech provides the highest downside, followed by Wipro and Satyam and TCS. Since economists believe the bottom is still a couple of quarters away, it could lead to an elongated period of slowdown for these firms.

Another significant trend is the move of Indian IT firms to rise up the value chain — to compete with the likes of IBM, Accenture and HP (EDS) — with these buyouts, which give them "complementary skills, added capability besides business transformation (when IT becomes a critical part of the business model) capabilities".

Source:
BPO Watch

Syntel Misses on Revenue and EPS; IT Headcount Falls

Based on lower revenue in the key Applications Outsourcing & BPO segments and a higher tax-rate – masked by currency translation gains and scaled-back hiring – key analysts are adjusting our estimates as follows: 2008 pro-forma EPS remains at $1.70 on revenue of $422 million (25% YoY growth but down from our prior $425 million projection); and 2009 pro-forma EPS stays unchanged at $1.95 on revenue of $507 million (20% YoY growth and down from $512 million previously).

Its observed Syntel might miss its well publicized 2010 internal revenue goal of 1 billion by nearly $400 million.

2Q08 results fell short of revenue and EPS estimates; the BPO engine suffered a dramatic deceleration (6.2% QoQ vs. 17.2% LTM); IT headcount dropped for the second straight quarter; 2008 EPS guidance of $1.74-1.82 includes $0.12 of non-recurring gains; excluding well- penetrated clients American Express and State Street Bank (35% of revenue), Syntel posted only 11% compound growth in 2005-07

Source:
Seeking Alpha

After Washington Mutual - WaMu, its the turn of Wachovia

Citigroup to buy Wachovia banking operations

In the latest byproduct of the widening global financial crisis, Citigroup Inc. will acquire the banking operations of Wachovia Corp. in a deal facilitated by the Federal Deposit Insurance Corp.

Citigroup will absorb up to $42 billion of losses from Wachovia's $312 billion loan portfolio, with the FDIC covering any remaining losses, the government agency said Monday. Citigroup also will issue $12 billion in preferred stock and warrants to the FDIC.

The deal greatly expands Citigroup's retail outlets and secures its place among the U.S. banking industry's Big Three, along with Bank of America Corp. and J.P. Morgan Chase & Co. But it comes at a cost -- Citigroup said Monday it will seek to sell $10 billion in common stock and slashed its quarterly dividend in half to 16 cents to shore up its capital position.

The agreement comes after a fevered weekend courtship in which Citigroup and Wells Fargo & Co. both were reportedly studying the books of Wachovia, which suffers from mounting losses linked to its ill-timed 2006 acquisition of mortgage lender Golden West Financial Corp.

Source:
Yahoo

3.3 million US jobs would have moved offshore by 2015

By the year 2015 an estimated 3.3 million US jobs would have moved offshore, a whooping 3000% increase from the year 2000.

India ranked first in the survey on where financial services companies' BPO providers are located with 21% . Russia is next with 10% followed by the Philippines (9%) and Eastern Europe (8%). The United States, Mexico, and Israel tied at 7%. (

For a comprehensive analysis refer the complete article.

Source:
MSN News