India's Outsourcers Should Worry about Delta's Move

Courtesy: http://www.businessweek.com/

Even when times were good and the US economy was humming along at full employment, American companies got some flack for outsourcing jobs to India. Now, with the unemployment rate rocketing toward 10%, the heat is getting to be too much for some US executives. On Saturday came news that Delta is the latest company pulling back from India. As Bloomberg reported, the airline has given up on using operators in Indian call centers to handle inquiries about reservations; customers weren’t happy with the service they got from the operators based in India.

Unfortunately for the Indian outsourcing industry, Delta is just the latest company to have second thoughts about outsourcing jobs to India during the worst US recession in generations. United Airlines has soured on India outsourcing, too, as has Sallie Mae. The student loan company is shifting jobs from India back to the US. As this story from India’s Economic Times earlier this month points out, “Some American outsourcing firms are trying to woo back customers already offshoring to low-cost destinations such as India. Smaller US firms such as Rural America Onshore Sourcing and Xpanxion are attempting to build a sustainable rural outsourcing model in the US at a time when offshore locations such as India are facing a backlash and unemployment rates have touched an all-time high.”

Obligatory note of caution: A few high-profile examples don’t necessarily make a trend. Still, at a time when the big Indian IT companies like Infosys, Wipro and TCS are already struggling as never before as big customers shrink or go belly up, any movement against outsourcing is the last thing Indian executives need. It’s ironic that the backlash against Indian call centers comes even as Americans have embraced a film celebrating the triumph of an Indian call-center worker. The hero of Slumdog Millionaire, which swept the Oscars in February, works in a call center. Unfortunately for some of his real-life colleagues, though, these days Americans prefer their Indian call center workers to be fictional.