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Computerworld - The collapse of Wall Street may prompt financial services firms to increase their use of offshore outsourcing and cut more jobs in the U.S. on top of the layoffs they have already announced.

And that job cutting will happen even with a taxpayer-backed $700 billion bailout. These firms will be under too much pressure to cut costs, and offshore outsourcing will be one way to do it, according to outsourcing consultants.

The financial services industry, including banking and insurance, is already the most aggressive industry in the U.S. when it comes to offshore outsourcing. It is the biggest single source of revenue for Indian offshore companies.

For instance, Infosys Technologies Ltd., which finished its most recent fiscal year in March with $4.18 billion in revenue, reported that nearly 36% of that revenue came from banking, financial services and insurance. For the same period, Wipro Ltd., reported that financial services contributed 25% to its annual revenue of nearly $5 billion. Satyam Computer Services Ltd. reported $2.13 billion in revenue for that same period and recently told investors that financial services would contribute 24% to 26% in revenue in this fiscal year.

In the short run, Peter Bendor-Samuel, founder and CEO of Everest Group, a consulting firm in Dallas, said the need for financial services firms to cut costs "will probably result in an acceleration of financial services jobs going offshore."

Bendor-Samuel said more regulation and oversight may create some headwinds to offshore outsourcing, but the factors he believes will have greatest effect on offshoring work will be the appreciation of the rupee and rising wages in India.

If Congress decides to link the Wall Street bailout to offshore outsourcing, and there are no signs that it will, the flashpoint may be the H-1B visa, which is heavily used Indian offshore outsourcing companies.

Indeed, the three companies cited earlier were also the three largest users of the H-1B visa in 2007, according to the U.S. Bureau of Citizenship and Immigration Services, which issues the temporary work visa. Infosys received approval for 4,559 H-1B visas last year; Wipro, 2,567; and Satyam, 1,396.

The H-1B visa has some tough critics in Congress, including Sen. Chuck Grassley (R-Iowa), who said last year that the visa "is so popular that it's now replacing the U.S. labor force." The U.S. is issuing 85,000 of these visas annually.

But Congress has generally supported the H-1B visa, and that includes Sens. John McCain (R-Ariz.) and Barack Obama (D-Ill.). Microsoft Corp. co-founder Bill Gates has been very vocal on the issue. It's questionable whether increasing unemployment and the Wall Street bailout will change this support.