Founder of Infosys technologies, one of India’s most reputed companies in the sector has to say the following about jobs cuts in India’s Information Technology (IT) industry, – ‘The global economic meltdown and the financial crisis looming large over the Indian economy will not result in any downsizing or job cuts in the IT industry‘. Well, what’s the truth behind this statement, read our perspective on how global meltdown is affecting the Indian IT industry
The current global turmoil has certainly shaken the confidence of the IT industry and has affected the exponential growth which the IT industry enjoyed for a period of 6-7 years starting from 2001. The phenomenal expansion lead to huge demand in jobs and kick-started the economic cycle giving more purchasing power to the youth of our country.
The rosy growth story of the Indian IT industry is slowly changing now with global corporations holding back any new IT initiatives and cutting their operations and technology (O&T) budget, I have friends working for some of the largest telecom and banks in the world and they confirm that the IT budget has been drastically cut leading to new projects drying up, this directly affects the Indian IT industry. The global slowdown has specifically affected those companies whose maximum revenue come from 1 or 2 large customers and their situation is worsened if these customers are related to the financial services industry.
I have heard news from internal sources that some of the companies (including the big 4 [Infosys,TCS,Satyam,Wipro] ) are laying out people in smaller chunks on the pretext of poor performance, they longer can afford to keep people on bench as they use to earlier.
Laying off people in smaller chunks also means that they escape being in the news for the wrong reasons. Apart from layoffs, there has been a dramatic reduction in the number of additions of new employees; companies like Satyam have given revised joining dates to the new recruits citing current global turmoil.
Slower growth with the Indian IT industry means other related feeder industries also take a beating resulting in overall dragging of the Indian economy. However, every cloud has a silver lining, here are two of them