Job cuts in Indian IT industry – Whats the truth
1Nov2008 Filed under: Latest News Author: jayFounder 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
- Weaker rupee is making exports of Indian IT industry competitive vis a vis other countries.
- Cost cutting exercise by large MNCs will result in more outsourcing thereby increasing business avenues for Indian IT industry
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i think this is all is crap even if company is making profits still say that they are in loss and if they this is gonna take place they should not recruit young people and what is the nation doing for such people who have being without jobs its really sad the companies which are not affected they say that they are affected we need to do something about this its a really bad situation in india
Last 7 years has seen uncontrolled growth in India with regards to IT and BPO. The demand for Job more than the supply of good techies, which resulted in unhealthy competition between the companies to acquire and retain good techies. However, this boom helped lot of average techies to get good job, good perks and I believe there was huge misuse of the growth. I like in UK and the salary growth here was not more than inflation rate, but my friends in India use to get upto 50% salary hike, which was so stupid.
I guess with the global crises, the companies will restore back the RIGHT SALARY! But what will that mean to those techies who have acquired too lavish lifestyle, spending more than his inflated salary. What will this mean to all those people who have taken huge loan to acquire big house?
I agree with the author that there is no job cut, but benefits are crunching. My friends say no more they are given air travel and free lunch is also removed. One of the companies have even increased the working hours and weekend workings to cover more workings during a week. So No Job Cut, but benefit cuts are at large!