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  •    
    Struggling Outsourcing Companies Attractive Targets for Acquisition

    Revenues of onshore outsourcing firms has squeezed by U.S. recession.Most companies experiencing competition with offshore outsourcing providers, lack of access to credit to finance operation, and dwindling client fools. Because of the recession in the U.S. some of the companies had bankrupted and many people lost their jobs. It increases business process outsourcing for organizations that seeks increase in the industry.

    Philippine-based company Ayala Corporation has been waiting for that exact opportunity to increase and to invest in outsourcing industry. In the interview of BusinessWorld to Rufino Luis Manotok Chief Financial Officer of Ayala Corporation said “We will investing in the BPO industry. While the growth rate slows down, the industry still grows”.

    It seems to be a wise decision for Ayala to buy the bankrupt Virginia-based firm. An audit, tax and advisory firm, KPMG, made a list of two cities in the Philippines, which is Davao and Iloilo to be the next location of outsourcing boom. It seems that the BPO industry in the Philippines will grow more and a lot of opportunities will be open for the job seekers.

    In their report 31 cities will challenge current well-known outsourcing locations in India and China according to KPMG. Outsourcing destinations in the Asia-Pacific region are attractive  destinations for lower costs, young and educated talent pool, and government incentives. Local BPO industry capitalize their strengths and look for possible acquisitions that can strenghten offshore market and market share. They plan to increase their market share in business process outsourcing industry.

    President Barack Obama’s remarks against outsourcing saying US companies had benefited from outsourcing since 50% of their business is overseas that leads to India’s global IT-BPO trade body NASSCOM to react.

    Som Mittal, President of NASSCOM comments that blames outsourcing for the increase of US unemployment rate. The latest US state department data proves job losses in construction, retail and manufacturing were higher than in services especially in IT (Information Technology). Mittal said, “In the US tech sector job losses 2.2 per cent against 7.2 per cent overall unemployment rate compared to other sector. Driven by the technology leadership its companies enjoy, US administration will not do anything that would harm the industry or the economy.” They make sure that everything is under control and that the industry will never be in trouble.

     

    REFERENCE:

    http://www.blog.infinit-o.com/outsourcing-companies-acquisition/

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