Everyone has this one question on lips: What will be the impact of the US
economic crisis on Indian IT companies and more importantly on jobs? BFSI is
already seeing so many layoffs, will IT also follow suit?We take a look at the
present Indian IT scenario and the hiring plans of Indian software companies for
the immediate future. But more importantly we dwell on what job seekers should
do to make the most of this scenario
Citigroup laying off 50,000 employees. PepsiCo retrenching its manpower by
14,000. Scary stuff! In this age of global slowdown, professionals across all
industries suffer night pangs, fearing the proverbial pink slip on the morrow.
Such fear is not new for IT professionals, as the 2001's dotcom bust is still
fresh in memory. Even during this recession, most surveys suggest that there
won't be too many job positions opening up in the coming year. So, while the US
has already caught a severe cold, how can Indian IT companies not even sneeze!
Should you panic?
NASSCOM subscribes to the theory of job cuts, however, and surprisingly indeed,
the Big 4 of the Indian IT industry have gone on record to announce their hiring
plans for 2009. Infosys has announced that it will be sticking to its original
plan of hiring 25,000 new people for the coming fiscal. TCS has already made
around 25,000 technical campuses offers for the year 2009-10, which
interestingly is 13% more than this year. Satyam too will be hiring 8000 to
10,000 people for the coming fiscal. Wipro has made offers to about 10,000
fresh-graduates and plans to do a 6000 lateral hiring of people. Campus hiring
from premier institutes is already over with most students securing decent job
offers. All this sounds rosy for IT professionals as far as job openings are
concerned. However, there's still cause for concern. NASSCOM has predicted that
there is likely to be a significant impact of the global crisis on the Indian
BPOs. India might see a reduction in software exports and outsourcing projects.
But, despite the general economic slowdown, India's IT and ITeS industry would
continue to log in 21-24 per cent growth this year, and would remain competitive
in the global market. Software Cos and BPOs would continue to grow, though not
at the pace they have been used to during the last few years.
So, for the moment it's the Banking and Financial Services sector that's been
hit by the US slowdown. As software exports and outsourced work coming to Indian
IT and ITES companies comprises mainly of the US banking projects, a decline in
recruitments is seen in this segment. On the contrary, verticals such as telecom
and infrastructure happen to be the least impacted and this is where all the
action is happening right now.
The slowdown will pass on in a year's time. This coming year could be a major opportunity for many IT companies to acquire new clients. How much has the global
What would be your advice to IT professionals during this slowdown and |
There is no need to press the panic button and get frightened by the thought
of being laid off. This surely is a passing phase and one where you could still
look at a lot of other opportunities in the IT industry. However, the honeymoon
period, where IT professionals, mainly at entry-level were being hired for an
anticipated project, and that too at good packages, might not happen as
frequently, as companies avoid to keep employees on bench. Also employers would
seek employees with a complete skill set knowledge and those who would be
willing to work on any vertical. So, brace yourself to be flexible to adjust to
any IT domain and also keep updating yourself on the newer domains coming up.
We have decided to step back a bit and wait for the decisions of our customers before further recruitment.
Given the scenario of a slowdown, what will be your advice to the
Are you planning any fresh recruitment in coming months? |
Slowdown and the Indian IT Industry
The economic slowdown seems to have both positive and negative impact. The
effect of the economic crisis in the US and the resulting economic growth
concerns is spreading across the world including India. The growth in India is
expected to come down to 7-8% from the earlier 8-10%. But despite the current
economic scenario, companies will continue to invest in IT. There could be some
short-term impact as corporates clamp down on costs to wade through the present
economic crisis. However, in the medium to long term, corporates would continue
to invest in IT as it would bring more efficiency, better customer service etc.
As a result, the technology spending in the medium and long term will also
continue to increase. According to NASSCOM, the Indian IT industry would grow at
22% this year compared to 29% last year. Also only 2,00,000 jobs were created
this year against the expected 2,70,000 jobs due to the slowdown. This reduction
in job creation is the negative effect of the slowdown as the IT firms dependent
on BFSI segment for business will see slow business growth. Apart from banking,
the other two major sectors, manufacturing and retail, will also be affected
from the slowdown and as a result to sustain costs, companies in these sectors
will also be curtailing their IT spending. Also as the US or the European
companies will be curtailing their expenditure, Indian IT companies would not be
in a position to send their employees on site to such countries for handling
projects. Thus, it is not just the domestic job scenario that will be impacted,
but even overseas job placements shall be hit.
The 2008 slowdown will result in more outsourcing, just as what 2001 recession resulted in. We believe that the IT industry will bounce back, there will be no dearth of job opportunities for the students or professionals. All they need to work on is honing their skills sets-to be competent to face the challenges in the IT sector. In the coming time, all Indian IT firms (including Infosys) would require professionals with specialized skills so as to meet their targets. We promised to hire 25,000 people in this FY 09 and we are well on our way to achieve this. Infosys pokesperson |
Advice: Score over others
Remember, 'survival of the fittest;' this is the time to work around this
phrase. The retrenchment policies of companies work around this as well. This is
the time when companies look for one good performer who can replace three
average performers. And even though the IT industry won't be seeing too many job
cuts, you could always keep yourself competitive and have that extra edge when
company starts identifying people to be laid off. This is the right time to
think about enhancing your knowledge. Professionals can opt for obtaining
certifications pertaining to their domain. Also obtaining the functional
knowledge of the business area to which you cater will only prove beneficial to
your career growth. If you have been on bench for a while due to scarcity of
projects coming in, then utilizing this opportunity to learn a new technology
through some professional institute or self learning can help you to widen your
career prospects. Certifications add credibility to an individual's inherent
knowledge about the subject. They also provide your resume that extra edge over
others during the short listing phase for selection.
Despite the economic slowdown, the telecom indutsry continues to grow
at an outstanding pace. The slowdown is a temporary phase which |
Once the economy starts stabilizing, these newly learned technologies or
certifications will prove to be advantageous. Also it will ensure that even if
due to this slowdown, if a sector faces downturn, you will be able to enter a
new sector because of your skills.
Opportunity areas
Fact one: Indian IT industry has been one of the badly hit sectors due to the US
economic recession. Fact two: It's the Banking and Financial sectors of the
industry that have been primarily responsible for a loss of business for IT
firms in India. Fact three: Indian economy will still grow at rate of 7% - 7.5%
and there are sectors that will fuel this growth. Infrastructure,
pharmaceuticals, health care, power and telecom will be the few sectors that
will be least affected from the slowdown and will still witness growth. The IT
industry will gain business from these sectors; also these sectors will require
IT services for their management needs. Similarly, public sector units and
railways have huge demand for IT professionals and they shall continue to give a
lot of business to the Indian IT firms. So, IT professionals will see reduction
in jobs from BFSI segment but there won't be dearth of opportunity as there will
be opportunities coming from other sectors of the industry. For example, many
BPOs and Banks employ networking and database professionals. These professionals
could also look at career growth in telecom. Ditto for software professionals,
as coding being the core of any project, shall always be in demand. But,
software professionals who had their expertise in banking or finance, will find
it difficult to change jobs. Also with their functional knowledge, it is not
advisable to change their focus. Because once the economy sets pace again, it
will again be the BFSI sector that will boom.
During this time of economic recession, IT professionals can seek |
Domain specific opportunities
There will still be opportunities in various sectors for IT professionals
despite the slowdown, but what's the skill set that professionals should focus
at? Let's take a look at various domains and opportunities there.
Open source: Organizations will look towards open source solutions to
run their business at reduced costs. Therefore professionals in this domain will
see increased demand. From operating systems such as Linux or the development
platform Java, such professionals will be sought after as organizations take to
adopting open source technologies to save operational costs.
We don't see any specific vertical within IT where there will be maximum job cuts. In the worst case scenario of likely job cuts, the professionals who would get impacted would be those who haven't lived up to the performance benchmarks set by organizations irrespective of their domain / skills. Freshers need not to change their career track under the fear of economic slowdown, they should rather work on their strengths and interests. It is going to be patience, resilience and a greater degree of flexibility to mould themselves according to the chang SV Krishnan, Global Head HR, Satyam Computer Services |
Embedded Technology: There has been a lot of embedded technology being
used in the mobile and electronic devices segment such as DVD players, set-top
boxes, etc. As the electronics industry as well as the mobile industry is
witnessing huge demand, there will be vast scope of opportunities for embedded
programmers to program the chip as well as in the area of creating mobile
operating environment.
Software development: The major contribution of revenue for IT
industry comes from software exports and outsourced services. Due to recession,
lesser business will come India's way, so developers and testers will witness
reduced opportunities in sectors like banking and finance, but they will always
remain in demand for any project as they form the core of the development cycle.
Networking: Networking professionals have wide scope and reach in
almost every sector of the industry, as they are needed from infrastructure
setup to the security of the information network. Telecom, media and
broadcasting industry, SaaS providers will be the segments where networking
professionals can venture if the BFSI segment doesn't provide them with much
growth prospects.
Storage: Data explosion is taking place across all enterprises, and as
data is crucial for any enterprise, they shall be investing into data management
and security even more. Even networking professionals with certifications from
SNIA or EMC shall find huge prospects in this domain.
Enterprise applications: Enterprise business apps are the core of any
organization's business. Due to the slowdown, many enterprises will not plan new
implementations, but it will be a necessity for them to maintain their present
Enterprise Apps. The Enterprise Apps professionals will not find the same level
of demand as was the case earlier, but they will still have opportunities coming
from new sectors, that have till now remained insulated from slowdown. Also
consultants will witness new opportunities, as to cut costs enterprises will be
handing over their key operations to consultants so that enterprises will not
have to bear the overheads of keeping manpower to maintain such operations.
Final words
Economic slow down is a cyclical process, so there's nothing to worry about.
Consider it as an opportunity to hone your skills and become more indispensable
to your organization. Once it's over, you'll emerge stronger than ever before!