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10:53 AM
Paul McDougall, InformationWeek
Paul McDougall, InformationWeek
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270,000 More IT Jobs Headed Offshore

Offshore outsourcing will continue at brisk pace for next four years, then ease up as automation replaces offshoring as a way for companies to save money, a new study says.

Mounting political pressure will do little to stop the flow of technology and other jobs moving offshore to low-cost destinations like India and China, new research indicates.

Some 750,000 jobs in IT, finance, and other business services will be offshored from the U.S. and Western Europe to developing nations between now and 2016, according to a study released this week by the Hackett Group. Among the positions going overseas will be 270,000 IT jobs.

"In the U.S. and Europe, offshoring of business services and the rapid transformation of shared services into Global Business Services have had a significant negative impact on the jobs outlook for nearly a decade," said Hackett Group chief research officer Michel Janssen, in a statement. "That trend is going to hit us hard in the short term."

[For more on the weakening financial services IT job market, read Job Market Softens for Financial Services IT Professionals.]

Even more stunning is the researchers' assertion that only about half of the 8.2 million services jobs that existed in the U.S. and Western Europe as of 2002 will exist in four years. A total of 2.3 million business services jobs, including 1.1 million IT jobs, will have gone offshore in by 2016 since the trend started in the 1990s.

Offshore outsourcing is a boon to regions like Asia, South America, and Eastern Europe—but only for so long, the Hackett Group said. While jobs that have gone offshore won't be coming back to the U.S., many of them won't exist at all, anywhere, in a few years, as automation increases and corporations get better at doing more with fewer workers.

"After the offshoring spike driven by the Great Recesssion in 2009, the well is clearly beginning to dry up. A decade from now the landscape will have fundamentally changed, and the flow of business services jobs to India and other low-cost countries will have ceased," said Janssen.

To read the entire original article, visit InformationWeek.

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