So says one study which shows that fewer companies are planning to do outsourcing in 2007, and more have "abnormally terminated" their overseas contracts in 2006. About 5 years ago, I was working for a major insurance company who attempted to cut costs by moving all programming overseas to India. The per-programmer costs were MINISCULE compared to American coders, so it seemed like a no-brainer. But quickly that company learned that you got what you paid for. Low paid programmers never worked more than the 9-to-5. And when the "9-to-5" was Indian time, that meant the company wound up paying BIG BUCKS for American managers who could keep tabs on the Indian programmers in the wee hours of every night. Overall, costs were only reduced slightly, and employee turnover in both India and American went WAY up.
Compare that to the company I currently work for which Outsources nothing, but does hire H1B Visa applicants when American programmers are not available. This company has low employee turnover, lower costs, and a reasonably high level of quality.
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