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Bay Area Tech Firms Reevaluate Outsourcing Amid Egypt Crisis

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People demonstrate in support of the Egyptian people's protests against the regime of President Hosni Mubarak in front of the Egyptian embassy in Washington on January 29, 2011 (photo: NICHOLAS KAMM/AFP/Getty Images)

People demonstrate in support of the Egyptian people’s protests against the regime of President Hosni Mubarak in front of the Egyptian embassy in Washington on January 29, 2011 (photo: NICHOLAS KAMM/AFP/Getty Images)

SAN JOSE (KCBS) – Several Bay Area tech companies have had to shut down operations in Egypt because of that country’s massive political uprising.

Cisco Systems closed its Cairo offices, saying in a statement that the company is monitoring the situation. Hewlett-Packard has asked its employees in Egypt to telecommute for the time being.

Google has reportedly lost contact with its Middle East and North Africa head of marketing. Wael Ghonim was last heard from a week ago, when he tweeted that he was sleeping on the streets of Cairo during demonstrations.

KCBS’ Matt Bigler Reports:


Until recently, Egypt had been considered one of the most stable countries in the Middle East for high-tech investments, with many businesses seeking out the “Smart Village,” an industrial park outside Cairo.

“I’ve been to the Smart Village in Cairo and it feels like a little slice of Silicon Valley,” offered KCBS technology analyst Larry Magid. “But if you can’t get there, if you can’t get internet communications, what good is it?”

Now, companies are likely to think twice before selection a location for any outsourcing.

“You know, people had stopped thinking about the political risk in outsourcing,” acknowledged HfS Research CEO Phil Fersht. “And this has really reopened that concern. And you know, people are starting to look much more closely now at where their work is being delivered.”

“I think it’s raising a lot of eyebrows in terms of outsourcing in the future and whether locations with political risks are suitable.”

(© 2011 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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