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US outsourcing jobs to third world countries-Pros and Cons

With the aim of cutting cost, the US companies are outsourcing their jobs to third world countries.  Yes, US, has accepted the outsourcing of various service sector jobs.  Various US companies like IBM, Microsoft, Accenture and the likes have been adhering to this trend by hiring the workforce in developing countries.

With the advantages of globalization being so more profitable, major economies of the world are behind reaping the profits from it. However, profitable this may sound; the outsourcing has both benefits and disadvantages attached to it. This article shall give a small summary on the merits and demerits of outsourcing.


Many US based multinational companies in the run up to cutting costs, are choosing to outsource some of their functions to outsourcing companies in developing or third world countries like India, China, Philippines and the likes.

The advantages reaped range from cost cutting benefitting the multinationals, to the companies residing in developing countries, and their economy.
It is obvious that when a US multinational company is outsourcing their functions to the companies in developing countries, are cutting operational costs, thereby earn more revenue and getting the same work done at lower price and  at an excellent quality.

On the other side, this trend is also benefiting the companies in third world countries, for, they are getting more work, more work means, more employment done for getting more employees, more projects, more profits.

This not only affects positively the growth of the company but when looked from the macro level, this trend facilitates employment generation and industrialization, much needed in developing countries to help pump their economy and development.


However, this is only one side of the coin.  There is also the second side of the story, which is a bit more critical about the trend of US jobs outsourced to companies in developing countries.

When a US company outsources its operations/jobs to companies in developing countries, it is earning more and it helping let develop the economy of the vendor outsourcing company, however, this is said to have a negative impact on the US's economy.

The outsourcing of jobs means the employees working on that particular job are no more employed. This means the trend is to have a negative impact on the employment rate of the US economy. Once, the employment goes down, this creates the discontent among the workers with their employers.  This might lead to immigration of talented unemployed workforce to the other countries; the employers in the need to cut down on costs might never realize the worth of the unemployed workforce. It might even lead to a rebellion, one between the haves and haves not.  This might create an entire imbalance in the economy and polity of the state and might affect their overall growth and development.

Therefore, it is of vital importance for US companies that while reaping the benefits of global economic trends, and wanting to accelerate company profit, also be careful and diligent enough in fulfilling their duties as socially and economically responsible employers towards the state they are located in and are working for.