News on layoffs has become a norm nowadays. Some blame it on the economic slowdown, some on political bureaucracy while others blame it on offshore outsourcing. There could be a number of reasons for the job cuts but it all boils down to “cost reduction”.

Market pressures are looming at every corner of the globe and corporate executives are doing whatever they can to bring down cost in order to be more competitive. Before the economic slowdown, companies used to send non-core work to low-cost countries. But as the state of economies worsen, firms started to see offshore outsourcing in a different perspective.

The London School of Economics and Political Science (LSE) Outsourcing Unit published a report titled “Beyond BRIC”. The Outsourcing Unit researched on the state of outsourcing in non-BRIC (Brazil, Russia, India, and China) countries and global outsourcing trends. The study compares Egypt with 13 non-BRIC countries, namely; Romania, Bulgaria, Poland, Slovakia, Czech Republic, Belarus, Morocco, Tunisia, Costa Rica, Mexico, Venezuela, Vietnam and the Philippines.

In a situation when all of the world’s leaders are talking about the recession that is being experienced by the world’s top economy the majority of industries already know what to expect. Economists predict that manufacturing will slow down and consumer spending and retail will reduce significantly. This would be the first instance in history when the outsourcing industry will be faced in a world (not just countries) that is in a recession as there is no historical record yet to draw comparisons.  Many developing countries including the Philippines are staking millions if not thousands of jobs on the continued growth of the industry.

News abounds on the effects of the U.S. recession to the offshore community. Some reports say that the number of work to be outsourced this year is likely to fall, while others believe the recession would only fuel a company’s need to outsource to bring down cost.