Computerworld has reported that Disney has cancelled its plans to outsource specific IT work offshore to Cognizant, just two weeks after telling roughly 30 of its application developers that they would lose their jobs because of the move.

This change of heart comes just as the US government has started scrutinising outsourcing deals between US buyers and Indian service providers. The Indian Economic Times (ET) has reported that contracts involving Southern California Edison, Fossil, TCS and Infosys are all under investigation.

President of NASSCOM Shri R Chandrasekhar told the ET: "Undoubtedly [these probes] would have a damaging impact on future business. It is a serious concern… This has the potential of seriously destabilising the way the sector does business... and frankly, we are also dismayed by the way a hostile business environment is being created.”

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