Chilly Winter for Cognizant, Outsourcing?

The VAR Guy caught a chill last evening during a road trip from New York to Boston. But he wasn’t the only person suffering from shrinkage. Seems like Wall Street has turned from hot to cold on tech outsourcing companies like Cognizant, Infosys and Wipro. What the heck happened? All it took was one chilly call between Cognizant and financial analysts to send some investors running for the exits.

Barron’s was quick to describe the one-day outsourcing meltdown on its Web site. The VAR Guy has wondered for several years if/when Cognizant’s rapid growth would cool down. When the company’s CEO made mixed comments about the current Q4 outlook, investors pushed down Cognizant’s stock by nearly 20 percent by mid-day Nov. 6. Shares in Inofsys, Wipro and other outsources also fell significantly by mid-afternoon.

Is this a temporary setback our will this be the winter of discontent for IT outsourcing firms? The VAR Guy will ponder that question a bit longer as he reverses course and heads back to New York later today.