TCS and IBM layoffs – Is Indian IT industry headed for a slowdown?
Connect the dots, signals and tell us what do you think about the IT recession?
- TCS has shown the door to ~500 employees (~2-3 years of work experience), citing performance issues.
- IBM laid off ~700 employees (mostly freshers) citing…? “performance in aptitude tests that were recently conducted in undisclosed IBM India locations.”
- In another news, TCS cut the employee wage (across the board, I believe), since it couldn’t meet the EVA (Economic Value Added) targets.
- As per the data compiled by HR consulting firm ECA, Indians working with MNCs are slated to get the highest salary hike. [ET]
Now, lets look at a few ’signals’
- stronger rupee (= shrinking margin),
- a possible US recession,
- above all, increasing salaries (did you know wage gap between UAE and Indian salaries is on a decline?)
- Still not there – i.e. Indian IT companies, all said and done are still doing the same old ‘transactional’ work in nature (just that the $$ volumes have increased), but none of these cos. are engaged in high end consulting role – so essentially ‘cost factor’ is still the savior.
With rising salary levels, outsources will spend no time in looking for ‘cheaper options (i.e. china).
Is Indian IT industry headed for a slowdown? What do you think?
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Related posts:
- Indian IT Industry: Bangalore Engineers are the Costliest in the Country
- Is this Why US Recession Hit the Indian IT industry?
- Guess who is benefiting from the slowdown?
- Slowdown Impact: 5 Lakh Jobs Lost, 65% drop in Truck Sales, Fund Raising dips..and more
- Freelancers Rates Drop – Competition from Philippines Heats up [Lesson for Indian IT Industry]
About the author - Ashish Sinha is a Startup Mentor/Product Strategy Coach, and the founder/chief editor of pluGGd.in.
He has launched/managed couple of products (consumer as well as enterprise) in US and India, and now consults with startups/small businesses on their product/media strategy. He can be reached at: ashish (at) pluGGd.in [+91 98452 06443]
Although the US recession and the shrinking dollar are really indicators of a slowdown in the Indian IT industry, I think we can still prevent it due to the following factors :
1. The number of Indian startups (both international and domestic) are increasing.
2. Product-oriented companies or service-oriented companies with new products are increasing.
3. The domestic IT market is better than ever.
4. Bigwigs like Infosys , etc. are assuring (and this from pragmatisits like Narayan Murthy), that the US slowdown will not affect us.
5. The foray of Indian IT services in non-Us markets
Of course, I am reading this after a very long time but surprised to see such a DUMB comment by Raseel.
1. Indian startups are increasing. Really? do you have the numbers?
2. New products and services are increasing, who is going to utilize them? You?
3. Domestic IT market is better? How much income is given to the IT companies from domestic projects, numbers needed again
4. Infosys is assuring that US slow down doesn’t affect them, if they say so, they are dumbos and if you believe in what they are saying, you too a dick head. Affirmitive. 70% of the business to IT companies comes from US, 15% from Eurpoe and rest from asia and other parts of the world. Both US and Europe are headed into recession, wherelse will you provide service? Sahara, may be a better option.. what say?
5. Non US markets, ok, so convert other country’s currencies with that of India, are you ready to work for 15000 philippine currency?
Don’t quote either Murthy or Kris or Pai of Infosys, all are bloody bastards…they made hige layoffs, paid brives to media to stop propagating the fact…
Ashish, I think this is good sign for
1.balancing the rise of salary
2.allowing startup company to match the salary
3.change the perception of career seekers to look to startup (if BIG can’t guarantee job, why not try with startup and grow double in career ..in terms of hands-on high valued work experience and entrepreneurial experience)
4.motivating upcoming entrepreneur to try a risk route i.e. product development/different service model and plan long bootstrap. (just not follow traditional outsourcing route)
This is far from a “correction” – but good to know that MNCs are upping their standards – whatever the economic situation is.
This is the definetly an indication to the Indian IT Slowdown…This is because of Sub prime mortgage issue in US. Due to this all major banks are staying away from new projectes or enhancements and tryin to cut down the resources…
@Srini : But from what I heard (on a Podcast), the small businesses are NOT going to be affected by the sub-prime mortgage issue.
I work for a company in USA and we have indian offices. We do low level engineering and QA from these offices. For the past few years, we are facing with escalating salaries (40% yoy), enhanced attrition (20% in a year), and are having trouble hiring senior engineers. We are fedup and are seriously considering pulling back
Where would you probably take your business? I would guess China but they have language issues. Is it in insignificant barrier. I also heard smaller places such as the Philippines are offering some alternatives for low end projects and work. Thx
[...] do agree that things have gone a little wary in the last few years and given the IT layoffs @TCS/IBM, salary figures might get back on [...]
I think this was inevitable…
But it won’t be a sudden-panic kind of situation…our industry is maturing slowly…and now henceforth, just the price arbitrage won’t work…
Innovation would be the key to success…may be it’s a good sign for entrepreneurship…as more and more intelligent people would join innovative startups like Zamanzar
, and not always an Infosys or a TCS…
Hi,
We need to ensure the quality of service offered
Indian market is now has adjusted accordingly as various comapines has fired some candidates and on the other hand same comapny is hiring so the effect of IT slow down is not much effective at all.
i read a recent incident about layoff. It sounds awful. Seems employees are the ones who are suffering the most. http://spectatorspeaks.blogspot.com/2008/08/layoff-in-indian-it-industry.html
Have you guys checked this:http://www.jobeehive.com/company/layoffs ??? Too many layoffs in India.
[...] Newspapers mourn about the stories of layoffs hitting big companies like Reliance, IBM, TCS, YAHOO ! Companies very conveniently euphemize the term of layoff as Rightsize, downsize, [...]
We’ve been hearing this for months and months. There is no company immune to recession. I would say we should be prepared. This will get worse before it gets better.
Tcs layoff 50 employees today from delhi office
Some news i got from close
Keocera Layoff around 100 in bangalore
Headstrong layoffs
Hi, I am working for Headstrong for the past 2 years.
Headstrong is a hire and fire company. They hire you when they have work and fire you when something got scrapped. Not good for techies and good for those managers who has orientation towards financial domain.
Salarywise it is good but take home amount is surprisingly low. Working environment is very cool and very less work load.
Good company for a short term stay but not as a long run partner.
Resource management is very poor and ppl here are forced to work in different technologies irrespective of their prior exp.
Most of the projects are support projects and very less are purely development projects.
A very low level of individual growth for techies. Their orthodox approach of working for financial domain clients only is really pathetic.
Lay-offs in headstrong are routine basis no matter how the whole mkt is doing. They do a lot of lay-offs every year.
There is a slowdown in It industry in India so only worth able comapany’s can with stand in IT industry. This id invitable.
Target India has laid off some top people.
TCS is planning to layoff 5000 employees in year 2010 due to performance.There is also a news in the HR circles that in the coming year there will not be any hike in the salaries.
This news will be shared soon by email & in the ultimatix .
Hi,
Now obama has announced new Job policy. Most of the US govt jobs are with TCS. I think it will have a big impact on them.If they are able to live with 5000 Layoffs, it means they have done a great Job.