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Outsourcers get crunched

The current market turmoil looks like it's going to hit offshore outsourcing firms pretty hard.

As the FT reported a couple of days ago, firms like HCL and Wipro are putting a brave face on the crisis, insisting the events at Lehman - a customer of both - won't have much of an impact on them.

But despite the bullishness, Wachovia Capital Markets has just downgraded the IT offshore outsourcing sector to "market weight" from "overweight", predicting the financial services industry (estimated to account for around 40% of their business) just might want to cut back on spending in the current climate.

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