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Job Prospects for IT Graduates Bleak This Year: Real Estate Will Doom

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Job Prospects for IT Graduates Bleak This Year: Real Estate Will Doom

Last updated: June 16 2009
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  • Job Prospects for IT Graduates Bleak This Year: Real Estate Will Doom

    Source: Economic Times


    Job prospects for IT graduates bleak this year: Experts
    12 Jun 2009, 1841 hrs IST, PTI

    BANGALORE: Top executives of country's two premier IT companies today drew a bleak picture of ="http://economictimes.indiatimes.com/News/News-By-Industry/Jobs/Job-prospects-for-IT-graduates-bleak-this-year-Experts/articleshow/4649698.cms"]employment opportunities[/url] for fresh engineers

    Observing that IT industry's growth rate in the current financial year is going to be "very muted", Infosys CEO S Gopalakrishnan said,"="http://economictimes.indiatimes.com/News/News-By-Industry/Jobs/Job-prospects-for-IT-graduates-bleak-this-year-Experts/articleshow/4649698.cms"]Employment opportunities[/url] for new graduates are going to be very limited." He added that once the recovery happens and growth comes back, there would be a surge in demand for graduate engineers again.

    Speaking at the fifth India Innovation Summit 2009, organised by the Confederation of Indian Industry, he also stressed the need for continuously improving quality of education.

    Speaking at the function, Wipro Chairman Azim Premji said that a large number of unemployed engineers would lead to their salaries plunging.

    Recalling his interaction with the Vice-Chancellor of Anna University, Premji said there is possibility of a large number of engineers graduating this year not getting jobs.

    He quoted the Vice-Chancellor as saying that as much as 40-50 per cent of the graduating engineers from some 300 affiliated colleges in 2008-09 would not get jobs. This figure is expected to go up to 80 per cent in regard to those who pass out in the current financial year.

    The Wipro chief also indicated that carry-over of such a large number of unemployed engineers would lead to salaries of engineers coming down sharply.

    He said earlier engineers never experienced failures in job markets, they had four-five job offers at a time and could change their jobs "overnight" but that's not the case now as there has been a fundamental change in suppy-demand equation.

    Premji also cautioned the industry that competition globally is hotting up and warned the sector against falling into a mind trap of 'India Advantage'.

    "We have talked a lot about India advantage. That makes me extremely worried. It's a huge amount of thumping on the back (by Indian IT industry)," Premji said.

    He said BPO (business process outsourcing) exports from the Philippines this year would be "pretty close" to that of India's. Five years ago, BPO exports from the Philippines were probably 10 per cent of what India exported.

    ================================================== ===
    This will have chain effect on IT guys salary and impact on RE prices
  • #2

    #2

    Re : Job Prospects for IT Graduates Bleak This Year: Real Estate Will Doom

    Top recruiters defer IIM grads’ joining dates
    10 Jun 2009, 0207 hrs IST, Sreeradha D Basu & Sushmita Mohapatra, ET

    It has left IIM campuses across the country shaken and stirred. Some of the leading management consulting firms, traditional Slot Zero recruiters,


    are actually ‘benching’ IIM recruits they hired from campus earlier this year. More than 25 students from across IIM campuses in Ahmedabad, Bangalore and Calcutta have been asked to join nearly 6-12 months later than the initial joining date.

    According to sources, these recruiters include big names like McKinsey & Co, Bain & Co among others. And making it substantially worse for students whose joining dates have been pushed back are the salaries that they will be offered in the interim. Sources say that the students are likely to only draw about 25-35% of the lucrative salaries they were originally promised till such time they actually join the company. Only in some cases, the retainers are supposedly about 50% of the original packages, said sources. Salaries offered by these consulting companies are usually at Rs 20-25 lakh per annum. With student loans already run up, some students are reaching out to institute placement cells for help.

    “We have heard from some our students that their joining dates have been delayed. They will join much later,” said IIM-Bangalore, Calcutta and Ahmedabad officials, who did not wish to be named. It is pertinent to note that several students hired in these firms are toppers of their respective batches.

    Consulting firms have been preferred recruiters for IIM students since several years, invariably being selected to recruit for the Slot Zero slot. An email questionnaire sent by ET to McKinsey generated the following response: “As a private firm, we do not discuss the workings of the firm in line with our global confidentiality policy. However, we would like to reaffirm that we stand by the offers and our new hires will join us on mutually agreed start dates.”



    According to sources, while some students have reached out to the institute for projects and help, many are using the time to take up short-term courses. Some are even toying with the idea of starting entrepreneurship ventures.

    An IIM-Calcutta source told ET that none of the companies in question had made any formal communication to the institute in this regard, and that none of the students had turned down the offers, so far. And while some consulting firms are postponing the date of joining, certain investment banks have revoked their offers this placement season. For instance, Macquaire Bank, another Slot Zero recruiter, has also supposedly revoked its pre-placement offers made to IIM students.

    ==========================================
    Top level IIM grads are also in trouble. Salary class venturing into buying RE is minimal now

    Comment

    • #3

      #3

      Re : Job Prospects for IT Graduates Bleak This Year: Real Estate Will Doom

      Check out my post in "Chennai RE prices - Feb 2009"

      Originally posted by lovebird View Post
      Top recruiters defer IIM grads’ joining dates
      10 Jun 2009, 0207 hrs IST, Sreeradha D Basu & Sushmita Mohapatra, ET

      It has left IIM campuses across the country shaken and stirred. Some of the leading management consulting firms, traditional Slot Zero recruiters,
      To add further, check out my latest post in "Chennai RE prices - Feb 2009". Premji and Gopalakrishnan are saying the same thing.

      In addition, IIT Kanpur has only been able to place 74% of its output this year. While they invited 730 companies, only 130 turned up!!! and each took much less numbers.

      Have you heard of IIT falling short in placements?

      Nope, we have not seen the worst of this recession/depression yet!!!

      cheers

      Comment

      • #4

        #4

        Re : Job Prospects for IT Graduates Bleak This Year: Real Estate Will Doom

        Originally posted by wiseman View Post
        To add further, check out my latest post in "Chennai RE prices - Feb 2009". Premji and Gopalakrishnan are saying the same thing.

        In addition, IIT Kanpur has only been able to place 74% of its output this year. While they invited 730 companies, only 130 turned up!!! and each took much less numbers.

        Have you heard of IIT falling short in placements?

        Nope, we have not seen the worst of this recession/depression yet!!!

        cheers
        Wiseman - I am a ferocious follower of all your posts (now i know that nats will abuse me as well )...and very surprised by your vast knowledge and clarity in thinking..

        But based on the recent happenings (Indian election results, US economy stabilized, Stock market results, better indian export results, Oil pricing rising etc.,), I think the worse is over i.e on a worst case, RE will not go down from here..it'll be stabilised and remain stagnant before booming again..

        Mahesh K

        Comment

        • #5

          #5

          Re : Job Prospects for IT Graduates Bleak This Year: Real Estate Will Doom

          IT cos in a bind as foreign clients delay payments
          15 Jun 2009, 0010 hrs IST, N Shivapriya & Santanu Mishra, ET Bureau

          MUMBAI: Indian outsourcing firms are finding it hard to recover their dues from clients, a majority of which are in the crisis-hit US and Europe. As

          a percentage of their sales, the receivables of all the top three Indian IT exporters, except for Infosys Technologies, have shown a rising trend in the past few quarters.

          The rise in the percentage of receivables, or the payments due from clients, indicates that the IT firms are facing difficulty in getting payments in time. Some of these could turn out to be bad debts, which may have to be written off in the event of the client defaulting or going bankrupt. This concern is also reflected in the rising provision for doubtful debts in the top three IT firms, Tata Consultancy Services (TCS), Infosys and Wipro.

          “In an economic downturn, clearly there would be pressures on account receivables. There is also the risk that if a company declares bankruptcy, the entire accounts receivable becomes doubtful. Realising this, we focused on account receivable collections in the last six months,” said S Gopalakrishnan, CEO and MD, Infosys Technologies.

          Doubtful accounts have shown a sharp rise in the past three quarters —since September 2008 when the financial
          crisis took a turn for the worse with the collapse of some of the top investment banks. For Infosys, it jumped to Rs 82 crore in the September 2008 quarter from Rs 55 crore in the June 2008 quarter.

          Similarly, tcs has seen its doubtful debts jump to Rs 155 crore from Rs 111 crore in the same two period, and if one were to go by its ="http://economictimes.indiatimes.com/Personal-Finance/Savings-Centre/Analysis/IT-cos-in-a-bind-as-foreign-clients-delay-payments/articleshow/4656401.cms"]profit[/url] & loss account, to Rs 43 crore from Rs 4.5 crore in the same period. “These are related to certain client-specific events, and provisions that we have made with respect to 2-3 clients,” said TCS vice-president (finance), V Ramakrishnan.

          For Wipro doubtful debts have risen from Rs 123 crore in June 2008 quarter to Rs 192 crore in march 2009 quarter. “This increase was on account of a large existing customer filing for bankruptcy. Our outstanding as on the date of filing is subject to bankruptcy proceedings. We continue to work with the customer post filing,” said Manish Dugar, CFO, Wipro Technologies.

          Both Mr Dugar and Mr Ramakrishnan said they were taking steps to reduce the days of sales outstanding. Internal processes regarding collections and follow-ups with clients have become more rigorous. “There has been a significant push and that is reflected in our figures,” said Mr Dugar. TCS has managed to reduce its receivable as percentage of net sales by 2 percentage points in the last two quarters.

          “All firms are taking active steps to reduce the days of sales outstanding. Global liquidity situation has worsened considerably over last 12 months. To mitigate any potential risks, the internal processes relating to timely collection have been made even more rigorous,” said Mr Dugar. Wipro has managed to reduce its days sales outstanding (DSO) for its Global IT Services business from 67 to 60 over last couple of quarters.

          However, in one of its recent reports, brokerage firm CLSA warns that the problem of growing receivable could increase in the coming quarters because of increased instances of compromises by Indian vendors to lock-in volumes and relaxed credit terms in new and re-negotiated deals.

          This could be an area of concern that investors need to keep a watch on in the coming quarters as it could impact the operating cash flow of the IT firms.

          Comment

          • #6

            #6

            Re : Job Prospects for IT Graduates Bleak This Year: Real Estate Will Doom

            Originally posted by Maheshk View Post
            Wiseman - I am a ferocious follower of all your posts (now i know that nats will abuse me as well )...and very surprised by your vast knowledge and clarity in thinking..

            But based on the recent happenings (Indian election results, US economy stabilized, Stock market results, better indian export results, Oil pricing rising etc.,), I think the worse is over i.e on a worst case, RE will not go down from here..it'll be stabilised and remain stagnant before booming again..

            Mahesh K
            I have no hate for your jalra views. However your current view in the above post makes sense. Yes RE will actually stabilise and start rising. In other words those who dont buy now are missing the bus once again and are cursed to live in their miserable existence.

            Comment

            • #7

              #7

              Re : Job Prospects for IT Graduates Bleak This Year: Real Estate Will Doom

              Originally posted by Maheshk View Post
              Wiseman - I am a ferocious follower of all your posts (now i know that nats will abuse me as well )...and very surprised by your vast knowledge and clarity in thinking..

              But based on the recent happenings (Indian election results, US economy stabilized, Stock market results, better indian export results, Oil pricing rising etc.,), I think the worse is over i.e on a worst case, RE will not go down from here..it'll be stabilised and remain stagnant before booming again..

              Mahesh K
              But big factor was IT growth which drove RE 3 years ago. Now that is down and continue to be in trouble.

              That is why RE is still in trouble and continue to be hopeless

              Comment

              • #8

                #8

                Re : Job Prospects for IT Graduates Bleak This Year: Real Estate Will Doom

                There are so many (many many) IT and Computer Science graduates in India now just when jobs in IT sector are shrinking. Given the supply-demand law of economics IT and Computer Science graduates will now be available at cheap costs making their salaries low. No doubt in engineering student counselling this year IT branches are least preferred.

                On the other side of the story, there is severe shortage of civil engineers, power plant engineers, oil & gas engineers, petrochemical engineers, nuclear engineers in India.

                Just look at this.

                Cairn Energy is now ready to pipe crude oil from their Rajasthan mangala block. There is 3 billion barrels of crude at Cairn's Rajasthan blocks to supply to refiners for next 15 years. Cairn also has other blocks in Rajasthan which are at various stages of discovery.

                NTPC and BHEL (I salute these PSU navaratnas which have delivered excellant returns to shareholders) are opening a Rs.7500 crore joint collabaration power turbine manufacturing plant at Chittor district Andhra Pradesh (which is coincidently very near Chennai) which will be inaugurated by Dr.Manmohan Singh himself.

                Reliance Industries (I am convinced this company will be more valuable than General Electric in 5 years) have completed the piping of natural gas from their KG block in record time of 6 years since discovery.(this is a world record in natural gas piping from discovery stage).

                Now ONGC is leasing an oil rig from Reliance at KG basin for RS.3500 crore (see in oil industry leasing a rig costs in thousands of crores).

                Penny IT industry LOL! at always cribing narayan murty. Narayan Murty in 1999 proudly said manufacturing sector in India must learn to be competitive ...10 years later Reliance Industries, BHEL, NTPC are laughing at infosys share value...sell infosys before it crashes furthur.
                Last edited by contra; June 15 2009, 07:22 PM. Reason: grammer & spelling

                Comment

                • #9

                  #9

                  Re : Job Prospects for IT Graduates Bleak This Year: Real Estate Will Doom

                  Industries go through cycles. Countries go through cycles. India is on the upsurge much to the discontent of the developed world. So if 100 useless IT guys are in dumps they might find jobs in other fields. After all most Comp Science grads know NO Comp science. They just collected a degree there and all they do is plain programming! Now in 1980s and 90s many non Comp Science guys were recruited in CS field. Soon CS grads may be recruited in other fields but unfortunately I dont believe CS grads are engineers. I know that CS is plain maths and I think I am more qualified to tell this as I have a B.Tech in Aero from IIT M and M.E. in Comp Science from IISc. So the CS guys might not be let into Engg jobs. So their problem may not be easily solved but that has no relevance to the growth of INdia.

                  Comment

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