Finally, the Indian Tier 3 players. Hexaware saw a 16 percent rise in revenue but a 57 percent drop in net profit due to loss in forex hedges. Significant issues for almost all players in the industry are currency movement and forex hedges. Hexaware is cautiously optimistic and has pointed to declining headcount, some pricing pressure, a circumspect approach from some clients and a two tough quarters. Sonata, an outsourcer with significant revenues from the travel vertical, saw its revenues rise by 25 percent. Though it has seen decision cycles elongate, it is quite comfortable with its outlook and does not have any adverse expectations.

Most in the Tier 2 and 3 segments are feeling the impact and expect the effect of the recession to increase, while some haven't show evidence of that impact as yet. Growth rates, however, have been lowered to more realistic levels.

What It Means for Offshoring, So Far

To summarize, one quarter into the economic crisis, the offshore outsourcers have held on well, and are making the adjustments they need to make. It's not panic time as yet. However, the boom in offshore outsourcing that some predicted the crisis will bring, has not happened and is not expected to happen either. We are living in interesting times, and I eagerly look forward to the next round of quarterly results...that will give . Until then, keep your fingers crossed...