Pink Slips With A Silver Lining

As the American economy goes into a tailspin, with Dell laying off 1,200, Nokia shutting down its German plant, the question is whether the tremors of its slowing economy are making an impact onshore. Possible, as 500-employees are laid off at Tata Consultancy Services and 700 at IBM India.

This has the IT-employees worried, as the days of hefty pay cheques and bonuses seem to be replaced by anxious days reminiscent of the 2,000 meltdown, when the country’s pampered Sunrise sector wondered ‘whose turn it could be next’.

Kris Gopalakrishnan, CEO, Infosys, India confirms the fears, saying: “Pink slips are possible in the industry.” Adding it all depends on a company’s clients and those IT firms with clients in the services sectors, BFSI and retail to be the most affected.

While, the news seems to have rattled many tech firms, it should not come as such a surprise knowing that there are few other sectors so closely bound by the global markets as information technology. Global sentiments affecting the industry is but a natural outcome, say the analysts studying the situation. And, not so long ago other analysts were predicting that India would be facing a talent shortage with not enough graduates to fuel the demand. Well, if the lay-offs continue and the pampered darlings of the tech world are shocked into the real world, the industry is in fact expected to come on par with its global counterparts in terms of salary increments and annual growth.

Sourabh Kaushal, Industry Manager, ICT Practice, Frost & Sullivan, South Asia & Middle East, news from the TCS and IBM stables could be seen as early signs. “These are still early signs. However, facing a US recession, IT companies are under great pressure. So, in future we may see this trend growing with companies undertaking strategic restructuring.”

Quite simply put, it means that the western techie’s pay cheque will soon match that of what his counterpart in the East, read India, China, and other countries outsourcing their services, receives. While, many of the Indian techie Diaspora i.e. those who immigrated to USA and Europe e in search of greener pastures, began to trickle back to India, as soon as its IT industry began to take over the world. They will be returning in droves when salaries in East and West become on par.

Before that happens, here are some of the top tech companies in India and overseas, who began to trim their workforce in the past few months.

1. Tata Consultancy Services: After first cutting variable salaries across the board, a lean period due to external business dynamics saw India’s largest private sector employer and Asia’s largest software exporter show the door to 500-employees, citing poor performances.

2. IBM India has delivered pink slip to a sizeable chunk (700-across company locations, including 180-odd in Kolkata) of its entry-level trainee programmers (ELTPs) across major offices in India, most of whom were engineering graduates.

3. IndyMac Bancorp Inc.: One of the largest US mortgage lenders, IndyMac has eliminated 2,403 jobs, or 24% of its workforce, to cope with deteriorating housing and capital markets. This will impact three service providers in India i.e. Cognizant Technology Solutions, ExlService Holdings and WNS, with at least 400-450 people at the three service providers being let go.

4. Dell Inc.: More than 1,200 sales and support workers in North America are expected to get the pink slip, including 900 employees who will lose their jobs later this year as the company shutters one of its two call centers in Canada.

5. Yahoo Inc.: With a financial mess that deepened at the end of 2007, the slumping Internet icon has drawn up plans to lay off as many as 1,000-workers.

The list increases from Nokia closing its production plant in Bochum, Germany to Ericsson cutting 4,000 jobs globally, including 1,000 in Sweden, to Alcatel Lucent set to cut 400 jobs in France, heads are expected to roll everywhere, as the economy worsens in USA.

However, the good news for techies laid off in India, is that they will not have to wait too long before they are snapped up by some of the smaller IT firms, who were facing a skills shortage, since graduates opted for the big names when job hunting. So, all in all things will pan out pretty well for everyone in India’s IT world, pink slips and all!