Tech Companies Cool on Indian Outsourcing

Rising labor costs make hiring at home more attractive
By Sam Gale Rosen,  Newser Staff
Posted Jul 3, 2007 10:12 AM CDT
Tech Companies Cool on Indian Outsourcing
Call center employees at MphasiS and 24/7 Customer in Bangalore, India, receive one to three weeks of training before they begin taking calls. In addition to their technical training, they're coached   (KRT Photos)

India, the destination of choice for American tech companies looking for sophisticated but cheap labor, is beginning to lose its appeal, the Wall Street Journal reports. Rising pay scales are making it  too expensive to justify the complications of globalizing. Now some are outsourcing their outsourcing to slower climes like Vietnam and even Poland.

Small firms have been the first to turn away from the subcontinent; shifting hiring back  to the US. But the behemoths are slowly following—Intel is putting the brakes on growth at its Bangalore outpost. "The wage inflation rate for engineers in India is four times what it is here," Intel's CEO says. (More India stories.)

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