Source: Economic Times

IT services may see over one lakh layoffs by September: Experts
27 Apr 2009, 1506 hrs IST, PTI




NEW DELHI: The Indian IT services sector may see up to five per cent layoffs -- amounting to more than one lakh job cuts -- over the next six months


as companies focus more on cost-cutting due to persisting weakness in global demand, experts say.

Companies may reduce workforce in this fiscal, mostly based on stringent performance criteria, experts added.

"We expect the knowledge industry (IT) to see 3-5 per cent non-voluntary exits in the first two quarters of the financial year mainly in senior and middle levels," Deloitte Touche Tohmatsu Senior Director (Management Consultancy Services) P Thiruvengadam told PTI.

Given the fact that more than 22 lakh people in the IT industry, five per cent non-voluntary exits would mean more than one lakh employees being shown the door by September.


Nasscom estimates more than 22 lakh people were working in the Indian IT-BPO sector in FY2009 (till February), while indirect job creation is estimated at about eight million.

International Institute (IMI) Director C S Venkata Ratnam said, "The IT sector is better off but it may see up to 4-5 per cent job losses in the first two quarters of this fiscal."

The global financial turmoil has also hit the country's other export-related sectors including textiles and some unorganised industries like auto ancillaries, Venkata Ratnam said.

Besides, IT services (including engineering services, R&D, products) exports, BPO exports and the domestic IT industry provide direct employment to 9,47,000, 7,90,000 and 5,00,000 people, respectively, Nasscom says.

The next 5-6 months would be critical for companies in deciding on job cuts. At present, layoffs are very few and more companies have frozen hiring to tackle the economic slowdown, Thiruvengadam said.

Last week, third-largest exporter Wipro said it would freeze salary hikes and is uncertain about campus recruitment.

Further, as per government data, over one lakh people lost jobs in the export sector due to the global downturn.

Asked about what strategy they are advising, experts said adopting a wait-and-watch policy and a mature outlook would be the best policy.

"If professionals aim towards multi-skilling and put in extra efforts to dabble in other areas of work as well, they stand a chance of becoming indispensable to their companies," Thiruvengadam

=====================================

All these will further lead to less demand in RE and lesser and lesser rentals in cities
Read more
Reply
14 Replies
Sort by :Filter by :
No replies found.