US layoffs, slowdown
In recent times, the US has witnessed layoffs by big companies such as Google, Microsoft, and Boeing, and the looming recession has created a buzz that outsourcing to India may increase. According to real estate experts, this will help boost the demand for office properties in India. Cheaper real estate and talent will make India an attractive destination for businesses, especially if the US goes into recession. This is expected to occur in the next two to three quarters, making India a 'definitive destination' for outsourcing, R&D, product development, and AI across sectors.
However, not everyone agrees. Some experts argue that since companies are not expanding and are cutting down on assignments, outsourcing to India may not increase in the immediate future. The Indian IT industry has also been experiencing its own share of layoffs. In 2022, the office leasing market in India witnessed strong momentum in the first half but fizzled out in the second half due to looming recessionary threats in major economies and a slowdown in hiring by Indian IT/ITeS.
While a recession does not automatically mean that companies will move jobs to India to reduce costs, even if some functions were to move, the numbers would not be large enough to require an immediate increase in workspace. The current flexibility in work-from-anywhere arrangements means that existing office spaces have enough capacity to accommodate potential headcount increases.
In conclusion, while the demand for office properties in India may improve in the future due to outsourcing, it is essential to keep in mind that the situation is not as straightforward as it may seem. However, with India's stable political climate, successful Covid-19 management, drive for ease of doing business, and two decades of profitable business in the country, India continues to be a strategic partner for outsourcing and product development.