One after another IT outsourcing industry bellwethers like Infosys and today Wipro have posted lower than expected revenues. Cognizant and HCL seem to be battling this downturn by firing employees to contain costs. As the Economic Times has opined, the industry needs to look for a new revenue model or risk dying out (also see graphic from the article). I will add that there is a fundamental shift in technology taking place such as the move towards cloud computing with the evolution of software as a service.
The long term trend for the IT Outsources if they do not change their model (and perhaps its too late now for them) seems to be on a slippery slope downwards towards irrelevance. Shorting these companies are more safely - staying away from them completely in your portfolios is highly recommended over the medium to long term.
