Global financial firms go slow on recruitment - Lehman shuts down Mumbai unit

Lehman Brothers is reportedly shutting down their 100 person Mumbai unit noted in the above article on Hindustan Times. Merrill Lynch is also reported to be scaling back its India operations significantly.

Although the article notes this as a probable cost saving measure I would think that it is equally an effort to focus on core competencies. This is another example that supports my previous thread on the increasing difficulty for companies to run offshore service captives that do not have any revenue generating function in the host country.

Expect a whole host of this kind of news in the coming months and the remnants of a majority of captives being picked up by large offshore outsourcing vendors. Good times to be a vulture investor if you wanted to pickup "fire sale" equipment, office space and of course talented and trained employees from these departing captives.