From a wave of layoffs as Western companies retrench, Gurgeon, a suburb of Delhi is suffering. In the Gurgaons Central from glass-fronted buildings that house Nestle American Express and other of the multinationals, the terrace at Hao Shi Nian, the restaurant in Gurgaons Central Plaza Mall offers a good sense of the city. The Chinese restaurant is among the top lunch destinations in the suburb of Delhi, the India’s Capital.
The place has a few customers after the dumplings arrive. The manager declines to talk about the sales, however a waiter pouring water whispers bravely. With the America’s, gurgaon problem is that its economy has become intertwined. A decade ago the gurgaon was little more than a farming community. The town became a preferred location and the outsourcing boomed for companies that answer phones, create PowerPoint, presentations and do other business tasks for the US clients. The once-bucolic community has become a city of nearly 1 million and a nightmarish version of what India aspires to be a destination for a global investment with water shortages, iffy electricity and a horrific traffic jams. The things have slowed Gurgaons mentality has been affected, the people are more conservative.
Because of the nature of the work it does, gurgaon is especially vulnerable. The higher end jobs such as writing computer code typically go to Bangalore and elsewhere in the south because of that region’/s top-notch schools. Gurgaon is mostly lower level, the call centers and business process outsourcers with the less work, these shops are starting to close. The effects of the slowdown are beginning to show. Gurgaon is not a ghost town, there is still enough traffic to make commuting unpleasant for instance. While the India’s economy may expand by 5 percent this year, the 9 percent plus growth of recent times is gone and Gurgaon is feeling that decline more than most other places.
In the half of 2008, as the American and European clients hit the kids, India’s outsourcing industry saw contracts shrivel by 22 percent its worst performance in a decade. They have not seen a large-scale layoffs, they have not seen large scale layoffs as yet. In India, nobody collects layoff data but every day papers carry dire news. The 200 workers cut from an American Express call center, 300 from Boston-based Sapient. The young engineers huddle over a laptop, dissecting an online rumor that Wipro Technologies. India no. 3 Information Technology, might layoff 5,000.
The economic woe is taking its toll on the developers that built Gurgaon. Some 28 percent of the commercial real estate here is vacant compared with the shortages a year ago. Office rents have dropped 24 percent and will continue to fall. People are just waiting and watching before making commitments. The heart of the Gurgaon from the Central Plaza Mall. On the Golf course roa, a few workers mill around half-completed buildings. The huge signs advertise deep discounts.
In a dingy tax office the electricity is out, the telephone rings constantly an d an ancient computer is covered with a cloth. The bad news has the city fathers fretting that their revenues will plummet. A local tax commissioner, the collection is down, certainly this year, the marking the pages with a red pen.
REFERENCE:
http://bx.businessweek.com/india-offshore-outsourcing/view?url=http%3A%2F%2Fwww.businessweek.com%2Fmagazine%2Fcontent%2F09_18%2Fb4129059634340.htm
