Duncan TuckerBangalore-based outsourcing firm iGATE is going to shut down its operations in Latin America and focus on expanding its presence in North America and Europe, the Times of India reports.
iGATE will exit regions where it lacks the resources to build scale, such as Latin America, South Africa and Dubai, in order to focus on expansion in the US, Canada and Western Europe, where it has already announced plans to set up delivery centers or expand its existing facilities, the Times reported on November 20, following a technology summit in Bangalore.
“Either investments have been misdirected or are not relevant – we have to get a little more sharper and focused and take essentially a VC-type attitude and kill those that are not working,” iGATE’s newly appointed CEO Ashok Vemuri said at the meeting.
iGATE first moved into Latin America in October 2008, when it opened a US$2 million delivery center in Guadalajara, Mexico. Following the acquisition of Patni Computer Systems in 2011, iGATE also took on Patni’s delivery center in Queretaro, Mexico and another of its facilities in Sao Paulo, Brazil.
iGATE’s Global Delivery Center in Guadalajara told Nearshore Americas that it could not comment upon any speculation over its Latin American operations at this time.
Although I understand the need for focus, the growth in the future will not necessarily come from the US and Western Europe, but from emerging markets. This true not only for “native” companies (e.g. Multi-Latins) also for multinational/global companies that are the customers of IT companies. Just as an example, I recently talked to a very large private bank based in Europe, and they said the growth in their business is really growing in India, China, Brazil, Mexico and the Middle East; and not US / Western Europe. Also – it is not clear from the article if they may be withdrawing from the “local market”, or if they also would withdraw from the nearshore delivery business.