My Job Search and Trends in Industries

Credit crisis: IT cos may cut 25K jobs

September 17th, 2008

BANGALORE/NEW DELHI: The banking, financial services and insurance (BFSI) segment is the largest outsourcing vertical for Indian technology players. The space contributes up to 40 per cent of the revenues for some top IT firms.

The industry employs around 3,50,000 people in the BFSI space of which the top six players alone account for 180,000 jobs. The domain accounted for $10 billion of the total $32 billion revenues the industry posted during the last fiscal.

What’s happening in the global financial markets can result in the loss of as many as 20,000 to 25,000 jobs in India. That means, the likes of Cognizant, TCS, Infosys, HCL, Wipro and Satyam will announce huge layoffs over the next couple of quarters.

According to Dr Naresh Malhan, MD, Manpower India , about 9 per cent of the people employed in the BFSI, insurance, IT and ITeS sectors in India risk losing their jobs as a result of the financial meltdown. However, he says the overall market remains robust, with other sectors like manufacturing and construction still very promising.

Not everyone shares this view. “Many firms will also use the present economic environment as an excuse to cut flab,” says Uday Chawla, managing Partner, Transearch, India. “Letting go of people in good times is not acceptable, but is sure to escape media scrutiny in the current climate,” he adds.

But what is a threat for some, is an opportunity for others. “Merrill Lynch and Lehman are respected for the quality of talent they attract and train. It’s an opportunity for small firms desperate for quality leadership,” says Sanjiv Sachar, partner, Egon Zehnder.

“Candidates are insisting on protection clauses, with employment letters guaranteeing 1 or 2 years salary. This is more the rule than the exception today. There is a greater play on variable pay in this high-risk environment,” adds Sachar. “Economy is growing at 8 per cent. The layoffs in the financial services will make skills available to other sectors which are facing a leadership crunch,” agrees R Sankar, head-HR consulting practice at PwC.
Source:TOI

Entry Filed under: News