News Summary: Outsourcers could earn lower profits

News Summary: US immigration bill could slow Indian outsourcers, boosting their labor costs

Associated Press

THE PROPOSAL: Provisions in a proposed overhaul of U.S. immigration law will close loopholes that allow outsourcing companies to pay guest workers in the U.S. at rates often below wages for equivalently-skilled Americans.

THE RATIONALE: The proposed changes are in line with President Barack Obama's vows to make it tougher for U.S. companies to replace American workers with cheaper labor abroad, either by opening factories overseas or subcontracting their work

THE POTENTIAL HIT: The cost to Indian outsourcing companies, which do everything from run call centers to manage the massive amounts of transactional data generated by banks, could run to several hundred million dollars in lost profits.

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