Recession in US could be good news for Hyderabad’s IT hub

As many companies could outsource work to, which in turn will create employment opportunities.

Hyderabad: If recession were to hit the US as is being predicted, it will slow down the growth of the IT sector in general. However, this might turn out to be quite beneficial for some companies in India, especially the IT hubs in Hyderabad, Bengaluru and Pune.

This is because many companies could outsource work to, which in turn will create employment opportunities. Also, the kind of work being outsourced to India has gone up the order from being just some voice-based call centres.

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According to Manisha Saboo, President of industry body Hyderabad Software Enterprises Association and Infosys Hyderabad SEZ Centre Head, more work will come to India including Hyderabad. There will be opportunities in animation, semiconductor and new segments like the Mobility Valley here.

Hyderabad will continue to be attractive due to the presence of a thriving IT and startup ecosystem here. Companies will not have problems in getting the required skilled talent here. The Telangana Academy of Skills and Knowledge is also working to train the manpower as per requirements of the industry. Apart from this, the State government is taking up various developments which are enabling the creation of quality infrastructure, which will be a driving factor of growth, she said, adding that Hysea was also working with colleges as part of its talent management efforts.

“We see more companies setting up their Global Capability Centres (GCCs) here. Several companies have already announced their GCCs here in recent times. These centres create global products and solutions. Among others, embedded technologies will be a key aspect as there is a rise of connected devices. They will also focus on security and access segments,” said Saboo.

“The outsourcing scale can be large. For instance, instead of assigning a part of work to the companies, we see the possibility of the entire IT department getting outsourced,” she said.

Earlier, outsourcing works were only due to the cost arbitrage Indian companies gave. Even as that continues now, more companies are assigning work to India in their search for need for higher order skills to handle research and development, product development and similar works, which are the top of the pyramid in the outsourcing valuechain.

Several industry experts and veterans are coming back to India after their stint in the US. “Working with such people will be beneficial for companies as they are acquainted with business culture and negates the need for reorientation,” she said.

Rajiv Chilaka, President of industry body Telangana VFX, Animation and Gaming Association (TVAGA) and Founder and CEO of Hyderabad-based Green Gold Animations, said the city was also benefitting from the work-from-home still being practised in other offshore markets. Since they are not yet working from offices, some orders were being outsourced to Indian cities including Hyderabad. Most of the employees working in companies in Hyderabad have resumed working from respective offices, he said.

With companies here using new technologies like the Unreal Game Engine, and the State government focused on skilling aspects of the trade, Hyderabad was already getting some highend post-production assignments, he said.

“The hiring trend is positive in automotive, IT, solar, electric vehicles and technology. Within technology, the IT services segment is cautious as many are factoring a possible recession in the US. If recession happens, the growth plans of IT companies will be affected. However, recession will also increase outsourcing to India,” Deepak Agrawal, Co-Founder and CEO of TurboHire said earlier.

The outsourcing will also increase the office space requirements, which will help the real estate sector.

However, the employees working the US will be on the edge as a large number of companies in the US have announced job cuts or have plans to do so.