The Hindu Business Line : IT employees in the firing line

With the global meltdown impacting the demand for IT services, technology firms of all sizes trained their guns on reducing their biggest expenditure: employee costs.

Thus, laying off employees, ostensibly to re-align cost heads, became the norm for several companies. Some decided to slash employee salaries and clamp down on their perks. Still others postponed the joining dates of trainees by up to a year in the hope of a turnaround by then.

And those that have been impacted the most employed all three measures, in addition to other cost cutting practices. If indications coming from the top IT exporters are anything to go by, the rut for IT professionals may well continue into calendar 2009.

The IT/ITeS sector has been the biggest generator of employment opportunity for many years now. Till last year, top companies preferred hiring ‘best-of-breed’ recruits from campuses as they trusted the overall demand environment to be in their favour. According to HR industry people, the basic premise used to be that by the time the campus recruits complete the in-house training and become billable, there will be enough projects for them to be deployed into.

Slowdown impact

However, the US sub-prime crisis and the resultant global liquidity crunch has led purchasers of IT services to either cancel or postpone their engagements with Indian vendors. Moreover, the collapse of four major financial services giants in the US has badly impacted the IT industry which generates majority revenues from the financial services space. Decision making, in most cases, is not happening due to board level recasting in many client companies.

Some firms have ended up having on board employees who do not generate revenues but have to be paid monthly salaries. In many cases, such employees were shown the door by IT firms under the pretext of performance reviews.

While some companies did provide severance package and a proper notice period to the laid-off employees, manyasked the employees to leave in, at best, a week’s time. “Companies just want excuses for firing people. And the reason for firing could be as trivial as viewing a social networking site in office,” said a senior employee with a Bangalore-based IT services firm.

Waiting to join

Students in engineering colleges are already jittery about whether they will have jobs once they pass out. In companies such as Cognizant, MindTree and L&T Infotech, the joining dates have been stretched up to a year..

Among companies that went in for wage cuts is Tata Consultancy Services, the company’s largest software exporter.

Companies such as TCS and Accenture also increased their working hours. Firms such as Cisco, HP and Analog Devices gave an extended Christmas holiday to their India staff.

Glimmer of hope

For their part, employees are not complaining, given the uncertain times, as long as they are assured of having their job intact when they walk into work the next day. The situation is still not as bleak as it was in 2000-01, following the dotcom bust, believes Mr Rohit Ramani, Director Operations of EmmayHr. “Going forward, there is going to be a lot of thrust on senior-level hiring ,” he said.

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