Mumbai: Infosys, Wipro and Tata Consultancy Services (TCS) have bagged IT maintenance contracts from oil and gas giant British Petroleum (BP) Plc, the Indian IT firms said in separate statements on Wednesday.
According to the companies , BP selected them after undertaking a programme to consolidate its IT vendors for application development and maintenance.
Wednesday, August 26, 2009
Monday, August 24, 2009
IT BPO Mergers and Acquisitions go Slow
The pace of IT and BPO companies merging is slowing down. The reason for this is simple, at one point in time during December to February the morale and business confidence was its lowest and valuations had come down to multi year lows. However since february the markets have now again reverted and regained the lost ground.
This has resulted in valuations going up and hence mergers and acquisitions at these levels are risky.
Bangalore: In 2009, it seems that IT and BPO companies have stayed away from blockbuster merger and acquisition (M&A) deals. According to the data tracked by Grant Thornton, an accounting and consulting firm; against the total deals value of $1.3 billion in January-July 2008, the M&A space grossed only $616 million this year.
While the Tech Mahindra-Satyam deal bolstered the domestic numbers, the total value of cross-border deals (outbound and inbound combined) fell 83 percent to $156.5 million during January-July this year. The cross-border deal volume at 13 deals was a fraction of last year's level (47 deals).
A total of 16 PE transactions in the IT and BPO space grossed $108.6 million in January-July 2009, compared with 39 deals that yielded $258.3 million in the corresponding period last year. S Mahalingam, CFO and Executive Director, Tata Consultancy Services said, "The subdued level of M&A activity underlined the industry's thinking that given the tough environment, the focus should be on driving the day-to-day business."
According to Nasscom, India's IT and BPO industry is expected to clock an export revenue growth rate of 4-7 percent in the financial year (FY) 2010, substantially lower than the 16.3 percent recorded in FY 2009. Harish H V, Partner - Grant Thornton India said, "The entire mood in the industry had been weak due to the slowdown in key export markets. M&A was not on the top of the mind for most players. Although we expect the activity to pick-up in the coming months, the full-year numbers will still be lower than last year."
This has resulted in valuations going up and hence mergers and acquisitions at these levels are risky.
Bangalore: In 2009, it seems that IT and BPO companies have stayed away from blockbuster merger and acquisition (M&A) deals. According to the data tracked by Grant Thornton, an accounting and consulting firm; against the total deals value of $1.3 billion in January-July 2008, the M&A space grossed only $616 million this year.
While the Tech Mahindra-Satyam deal bolstered the domestic numbers, the total value of cross-border deals (outbound and inbound combined) fell 83 percent to $156.5 million during January-July this year. The cross-border deal volume at 13 deals was a fraction of last year's level (47 deals).
A total of 16 PE transactions in the IT and BPO space grossed $108.6 million in January-July 2009, compared with 39 deals that yielded $258.3 million in the corresponding period last year. S Mahalingam, CFO and Executive Director, Tata Consultancy Services said, "The subdued level of M&A activity underlined the industry's thinking that given the tough environment, the focus should be on driving the day-to-day business."
According to Nasscom, India's IT and BPO industry is expected to clock an export revenue growth rate of 4-7 percent in the financial year (FY) 2010, substantially lower than the 16.3 percent recorded in FY 2009. Harish H V, Partner - Grant Thornton India said, "The entire mood in the industry had been weak due to the slowdown in key export markets. M&A was not on the top of the mind for most players. Although we expect the activity to pick-up in the coming months, the full-year numbers will still be lower than last year."
Accenture to Lay off 336 senior level managers
Bangalore: Accenture, a business consulting and outsourcing company is likely to lay off around 336 senior-level managers as part of a broad-based restructuring effort. William Green, CEO, Accenture said, "We are taking this step to position Accenture better for both short-term and long-term economic improvement growth and profitability."
The company has about 177,000 employees globally, of which 4,800 are senior-executive employees. The lay off is likely to be completed by the end of November 2009. The company said that the reductions would cost about $247 million in the fourth quarter, which ends on August 31. Out of $247 million, about $128 million of the charge is for severance and related costs of workforce reductions at the senior executive level and $119 million linked to reduction of excess office space. The company said that the space reductions would be completed by the end of August, while the job cuts are expected to be completed in the first quarter of fiscal 2010.
According to a projection by Goldman Sachs Group, global technology spending will decline by eight percent this year. Accenture said that it continued to expect net revenues for the fourth quarter in the range of $5 billion to $5.2 billion with operating margins between 13.4 percent and 13.7 percent. But the company also added that the restructuring charges will likely reduce its earnings per share for both the fourth quarter and the full year by 24 cents.
The company had generated net revenue of $23.39 billion for the fiscal ended August 31, 2008. In the last one year, the stock of Accenture has climbed by 11 percent on the New York Stock Exchange (NYSE).
The company has about 177,000 employees globally, of which 4,800 are senior-executive employees. The lay off is likely to be completed by the end of November 2009. The company said that the reductions would cost about $247 million in the fourth quarter, which ends on August 31. Out of $247 million, about $128 million of the charge is for severance and related costs of workforce reductions at the senior executive level and $119 million linked to reduction of excess office space. The company said that the space reductions would be completed by the end of August, while the job cuts are expected to be completed in the first quarter of fiscal 2010.
According to a projection by Goldman Sachs Group, global technology spending will decline by eight percent this year. Accenture said that it continued to expect net revenues for the fourth quarter in the range of $5 billion to $5.2 billion with operating margins between 13.4 percent and 13.7 percent. But the company also added that the restructuring charges will likely reduce its earnings per share for both the fourth quarter and the full year by 24 cents.
The company had generated net revenue of $23.39 billion for the fiscal ended August 31, 2008. In the last one year, the stock of Accenture has climbed by 11 percent on the New York Stock Exchange (NYSE).
Saturday, August 22, 2009
IT unemployment hits five-year high
The economy may be showing its first green shoots but the IT industry doesn't seem to be showing any signs of perking up just yet.
Unemployment in the IT and telecoms industry has hit a five-year high, new research from industry skills body e-skills has found. In the first quarter of this year, the unemployment rate among ICT workers hit 4.8 per cent - its highest level since the first quarter of 2004.
IT strategy and planning workers were among those thought to be hardest hit, with a seven per cent quarter-on-quarter fall in employment rates.
ICT job advertisements declined significantly across the board in the first three months of this year, with situations vacant down by 27 per cent quarter-on-quarter for permanent workers and 32 per cent for contractors.
Despite growing unemployment, those currently in ICT work are apparently faring well, earning an average of £730 per week - up four per cent year-on-year and 40 per cent higher than the national average.
The majority of bonuses too are still surviving the recession, with around five per cent of staff picking up something extra in their pay packet in the first quarter of this year, down from six per cent in the corresponding period last year.
"It's still tough out there but overall ICT pros are still not doing so badly when you look at the big picture," the report noted.
Unemployment in the IT and telecoms industry has hit a five-year high, new research from industry skills body e-skills has found. In the first quarter of this year, the unemployment rate among ICT workers hit 4.8 per cent - its highest level since the first quarter of 2004.
IT strategy and planning workers were among those thought to be hardest hit, with a seven per cent quarter-on-quarter fall in employment rates.
ICT job advertisements declined significantly across the board in the first three months of this year, with situations vacant down by 27 per cent quarter-on-quarter for permanent workers and 32 per cent for contractors.
Despite growing unemployment, those currently in ICT work are apparently faring well, earning an average of £730 per week - up four per cent year-on-year and 40 per cent higher than the national average.
The majority of bonuses too are still surviving the recession, with around five per cent of staff picking up something extra in their pay packet in the first quarter of this year, down from six per cent in the corresponding period last year.
"It's still tough out there but overall ICT pros are still not doing so badly when you look at the big picture," the report noted.
HP forces swingeing pay cuts on EDS staff
HP is asking US based EDS staff to take their third pay cut of the year - this time as much as 30 per cent of their salaries.
Staff in the UK and Ireland have already been asked to take cuts of up to five per cent, and have also been encouraged to take unpaid leave over the summer.
But The Dallas Morning News reports that EDS workers are being asked to take a third pay cut this year. In February wages were cut between 2.5 per cent and 20 per cent. In April, all US and Puerto Rico based staff had to swallow a further ten per cent reduction in pay.
HP said the most recent cuts were necessary in order to get EDS pay in line with HP's and would not hit all staff.
One of several unhappy EDS workers told the paper: "I know that my career with this company is coming to an end. I can't survive after this kind of hit."
EDS staff on this side of the pond have seen cuts in canteen subsidies, pension and car allowances as well as pay cuts.
In more bad news for the ink giant, it emerged today that problems with its in-house commission system, Omega (inherited from Compaq), mean that about 2,000 of its top sales people are not getting the right monthly commissions. And they've been getting the wrong amounts for most of the year, according to The Wall Street Journal.
The paper has seen a string of emails apologising to staff for the pay problems which began in November. On the 8 June an email promised a final fix to the system. Four days later a further email apologised again for continuing problems. HP told the paper it had problems with an application but: "we expect to have this resolved shortly...".
HP sent us the following statement: "As part of the EDS integration process, a project was undertaken to ensure that employees in both EDS and HP, holding the same roles, receive comparable compensation based on market rates. While pay will not be impacted for the majority of employees as a result of this process, some employees will receive pay reductions while others will benefit from salary increases.
We understand that these changes personally impact our employees and we are working closely with them during this transition. EDS is an integral part of HP’s long term strategy to provide more services and solutions to our clients."
http://www.channelregister.co.uk/2009/08/06/eds_hp_paycuts/
Staff in the UK and Ireland have already been asked to take cuts of up to five per cent, and have also been encouraged to take unpaid leave over the summer.
But The Dallas Morning News reports that EDS workers are being asked to take a third pay cut this year. In February wages were cut between 2.5 per cent and 20 per cent. In April, all US and Puerto Rico based staff had to swallow a further ten per cent reduction in pay.
HP said the most recent cuts were necessary in order to get EDS pay in line with HP's and would not hit all staff.
One of several unhappy EDS workers told the paper: "I know that my career with this company is coming to an end. I can't survive after this kind of hit."
EDS staff on this side of the pond have seen cuts in canteen subsidies, pension and car allowances as well as pay cuts.
In more bad news for the ink giant, it emerged today that problems with its in-house commission system, Omega (inherited from Compaq), mean that about 2,000 of its top sales people are not getting the right monthly commissions. And they've been getting the wrong amounts for most of the year, according to The Wall Street Journal.
The paper has seen a string of emails apologising to staff for the pay problems which began in November. On the 8 June an email promised a final fix to the system. Four days later a further email apologised again for continuing problems. HP told the paper it had problems with an application but: "we expect to have this resolved shortly...".
HP sent us the following statement: "As part of the EDS integration process, a project was undertaken to ensure that employees in both EDS and HP, holding the same roles, receive comparable compensation based on market rates. While pay will not be impacted for the majority of employees as a result of this process, some employees will receive pay reductions while others will benefit from salary increases.
We understand that these changes personally impact our employees and we are working closely with them during this transition. EDS is an integral part of HP’s long term strategy to provide more services and solutions to our clients."
http://www.channelregister.co.uk/2009/08/06/eds_hp_paycuts/
Infosys most admired Indian company: WSJ survey
BANGALORE, INDIA: Indian IT giant Infosys Technologies has been adjudged as the most admired Indian company, ahead of Tata Consultancy Services and Bharti Airtel, according to a says a survey.
Infosys has topped the list of 10 most admired Indian companies and is followed by IT major TCS at the second position, according to the Asian 200 survey conducted by The Wall Street Journal Asia.
Telecom giant Bharti Airtel is at the third spot, engineering major Larsen & Toubro is fourth while IT firm Wipro is at the fifth position, said a PTI report.
TCS, Bharti Airtel come second and third, while Wipro is at fifth position
Others on the list are Tata Steel, Hindustan Unilever, HDFC Bank, State Bank of India and ITC. The ranking is based on the Asian 200 survey of subscribers of The Wall Street Journal Asia and other business people.
The survey takes into account factors such as financial reputation, vision, corporate reputation, quality and innovation. Infosys has also been ranked first in terms of corporate reputation, vision and quality.
When it comes to corporate reputation, TCS and Tata Steel are at the second and third spots, respectively.
As far as innovation is concerned, TCS has topped the list followed by Bharti Airtel and Infosys.
The multinational winner of the survey would be named on September 11.
http://www.ciol.com/News/News-Reports/Infosys-most-admired-Indian-company-WSJ-survey/14809123610/0/
Infosys has topped the list of 10 most admired Indian companies and is followed by IT major TCS at the second position, according to the Asian 200 survey conducted by The Wall Street Journal Asia.
Telecom giant Bharti Airtel is at the third spot, engineering major Larsen & Toubro is fourth while IT firm Wipro is at the fifth position, said a PTI report.
TCS, Bharti Airtel come second and third, while Wipro is at fifth position
Others on the list are Tata Steel, Hindustan Unilever, HDFC Bank, State Bank of India and ITC. The ranking is based on the Asian 200 survey of subscribers of The Wall Street Journal Asia and other business people.
The survey takes into account factors such as financial reputation, vision, corporate reputation, quality and innovation. Infosys has also been ranked first in terms of corporate reputation, vision and quality.
When it comes to corporate reputation, TCS and Tata Steel are at the second and third spots, respectively.
As far as innovation is concerned, TCS has topped the list followed by Bharti Airtel and Infosys.
The multinational winner of the survey would be named on September 11.
http://www.ciol.com/News/News-Reports/Infosys-most-admired-Indian-company-WSJ-survey/14809123610/0/
IT majors preparing strategy in line with revival of demand
With the first signs of recovery in the information technology (IT) sector, the three biggest IT companies — Tata Consultancy Services (TCS), Wipro Technologies and Infosys — are not only hopeful of bagging more overseas deals but have also modified their strategy to focus on near-shoring, where employees work at customer premises.
These companies are also reinforcing their product line, changing product offerings, focusing on ‘recession-proof’ sectors like pharma and healthcare, education, telecom and utilities to tide over the dip in volumes.
Wipro, for instance, is expecting a few big-ticket outsourcing deals — each valued upwards of $100 million — in the second quarter of 2009-10, in areas like IT services, consulting, remote management and business process outsourcing (BPO).
Suresh Senapaty, executive director and chief financial officer of Wipro, said, “Despite the slowdown, we expect to bag a few good deals in the second quarter, especially in the $100 million-plus range.”
Wipro had reportedly added 26 new clients in the first quarter (April-June 2009). “The total value of the new deals bagged in the first quarter works out to around $700 million, where a few are in the range of $30 million plus,” Senapaty said.
Likewise, Infosys, which posted a 17.3 per cent rise in first quarter net profit, is pursuing 12 to 15 deals worth $1 billion in the second quarter.
“We are pursuing deals worth $1 billion. The economy is gradually recovering and so we have 12-15 deals we can pursue right now. Emerging markets are a big opportunity for us, like Latin America, Europe, Japan, West Asia and Australia,” said S Gopalakrishnan, CEO and MD of Infosys.
TCS, on the other hand, is tweaking its product offerings for small and medium enterprises (SMEs).
Source:
http://www.business-standard.com/india/news/it-majors-preparing-strategy-in-linerevivaldemand/366493/
These companies are also reinforcing their product line, changing product offerings, focusing on ‘recession-proof’ sectors like pharma and healthcare, education, telecom and utilities to tide over the dip in volumes.
Wipro, for instance, is expecting a few big-ticket outsourcing deals — each valued upwards of $100 million — in the second quarter of 2009-10, in areas like IT services, consulting, remote management and business process outsourcing (BPO).
Suresh Senapaty, executive director and chief financial officer of Wipro, said, “Despite the slowdown, we expect to bag a few good deals in the second quarter, especially in the $100 million-plus range.”
Wipro had reportedly added 26 new clients in the first quarter (April-June 2009). “The total value of the new deals bagged in the first quarter works out to around $700 million, where a few are in the range of $30 million plus,” Senapaty said.
Likewise, Infosys, which posted a 17.3 per cent rise in first quarter net profit, is pursuing 12 to 15 deals worth $1 billion in the second quarter.
“We are pursuing deals worth $1 billion. The economy is gradually recovering and so we have 12-15 deals we can pursue right now. Emerging markets are a big opportunity for us, like Latin America, Europe, Japan, West Asia and Australia,” said S Gopalakrishnan, CEO and MD of Infosys.
TCS, on the other hand, is tweaking its product offerings for small and medium enterprises (SMEs).
Source:
http://www.business-standard.com/india/news/it-majors-preparing-strategy-in-linerevivaldemand/366493/
HP Warns Worried EDS Workers: Don't Go to Media
EDS employees in Plano are comparing their job security to that of an undrafted rookie trying to make the Dallas Cowboys roster.
Andy Mattes, the senior vice president of EDS Americas, addressed employee concerns about salary cuts and layoffs -- and warned workers not to talk to the news media -- in a podcast obtained by NBCDFW.com.
"A., this is not easy, and we as a management team appreciate that," Mattes said in the podcast. "B., if you're impacted, that is painful, and there is nothing that I can tell you that's going to make that pain go away."
Mattes began the employee town hall with a "legal disclaimer" that "anything that I do or say may or may not resemble the truth when it comes to forward-looking statements."
HP: If Leaks Continue, "You'll Get Whitewashed Statements"
HP: If Leaks Continue, "You'll Get Whitewashed Statements"
WATCH
HP: If Leaks Continue, "You'll Get Whitewashed Statements"
Mattes also urged employees to not speak with the media about their concerns. An EDS employee anonymously told NBCDFW.com last week that his salary was being cut by one-third.
"People have been leaking stuff into the news," Mattes said. "I can only urge you to keep the conversation that we're having here amongst ourselves. The more we can keep it amongst ourselves, the more open we can talk. If we have to get the feeling that everything that we do will show up in the newspapers tomorrow, you'll get whitewashed statements."
But several EDS employees said they feel information is already being whitewashed for themselves, as well as customers and potential clients. They said the warning against speaking to the news media is intended to keep issues of morale and the potential impact on customers quiet.
Employees say morale is low, anxiety is high and productivity is down as many workers spend part of their days on task and part of it searching for new employment.
Workers said they fear every day that they will receive a tap on the shoulder -- or an e-mail -- informing them their services are no longer required.
Hewlett-Packard, which bought the company last year, is relocating 150 information-technology jobs from North Texas to cities such as Austin, Houston and Atlanta.
"HP will transition IT resources from Plano, Texas, to other locations..." the company said in a statement. "All affected will be given the opportunity and financial support to relocate to other HP offices."
But employees described it as a take-it or leave-it offer from a company that is asking some employees to risk relocation while at the same time cutting salaries of EDS workers up to nearly 50 percent in some cases.
In the podcast townhall meeting about the company's new job architecture, Mattes said 20 percent of HP-EDS employees regionally have been impacted by the salary cuts.
He repeatedly said the changes are painful, but necessary and would have been worse years from now if the company had not taken steps to restructure in this economy.
HP spokesmen confirmed the 150 job relocations but offered no comment on Mattes' statements in the podcast or on questions about cuts and other issues.
Source:
http://www.nbcdfw.com/news/business/HP-Warns-Worried-EDS-Workers-Dont-Go-to-Media-53188707.html
Andy Mattes, the senior vice president of EDS Americas, addressed employee concerns about salary cuts and layoffs -- and warned workers not to talk to the news media -- in a podcast obtained by NBCDFW.com.
"A., this is not easy, and we as a management team appreciate that," Mattes said in the podcast. "B., if you're impacted, that is painful, and there is nothing that I can tell you that's going to make that pain go away."
Mattes began the employee town hall with a "legal disclaimer" that "anything that I do or say may or may not resemble the truth when it comes to forward-looking statements."
HP: If Leaks Continue, "You'll Get Whitewashed Statements"
HP: If Leaks Continue, "You'll Get Whitewashed Statements"
WATCH
HP: If Leaks Continue, "You'll Get Whitewashed Statements"
Mattes also urged employees to not speak with the media about their concerns. An EDS employee anonymously told NBCDFW.com last week that his salary was being cut by one-third.
"People have been leaking stuff into the news," Mattes said. "I can only urge you to keep the conversation that we're having here amongst ourselves. The more we can keep it amongst ourselves, the more open we can talk. If we have to get the feeling that everything that we do will show up in the newspapers tomorrow, you'll get whitewashed statements."
But several EDS employees said they feel information is already being whitewashed for themselves, as well as customers and potential clients. They said the warning against speaking to the news media is intended to keep issues of morale and the potential impact on customers quiet.
Employees say morale is low, anxiety is high and productivity is down as many workers spend part of their days on task and part of it searching for new employment.
Workers said they fear every day that they will receive a tap on the shoulder -- or an e-mail -- informing them their services are no longer required.
Hewlett-Packard, which bought the company last year, is relocating 150 information-technology jobs from North Texas to cities such as Austin, Houston and Atlanta.
"HP will transition IT resources from Plano, Texas, to other locations..." the company said in a statement. "All affected will be given the opportunity and financial support to relocate to other HP offices."
But employees described it as a take-it or leave-it offer from a company that is asking some employees to risk relocation while at the same time cutting salaries of EDS workers up to nearly 50 percent in some cases.
In the podcast townhall meeting about the company's new job architecture, Mattes said 20 percent of HP-EDS employees regionally have been impacted by the salary cuts.
He repeatedly said the changes are painful, but necessary and would have been worse years from now if the company had not taken steps to restructure in this economy.
HP spokesmen confirmed the 150 job relocations but offered no comment on Mattes' statements in the podcast or on questions about cuts and other issues.
Source:
http://www.nbcdfw.com/news/business/HP-Warns-Worried-EDS-Workers-Dont-Go-to-Media-53188707.html
Accenture to lay off senior executive workforce by 7%
Updated on Friday, August 21, 2009, 11:12 IST
Chicago: Global management consulting and outsourcing company Accenture is reducing its senior executive workforce by seven percent besides, pruning real estate capacity as part of restructuring efforts.
Restructuring is expected to cost the company USD 247 million in the fourth quarter of fiscal 2009 ending August 31.
Of the costs, about USD 119 million would be related to reduction of excess office space globally and the remaining for severance and related costs of workforce reduction.
The seven percent workforce reduction would mean over 300 senior-executives would be laid-off.
"As part of our drive to deliver high performance... we are acting boldly to position Accenture better for both short-term and long-term economic improvement growth and profitability," Accenture Chairman and CEO William Green said in a statement today.
The New-York based company expects space reductions to be completed by end of the current fiscal and the workforce actions to be completed during the first quarter of fiscal year 2010.
Prior to the cut, the company had 4,800 senior-executive employees and a total of 177,000 employees globally.
Green said the company is taking steps to ensure that it has the right cost structure to support the business going forward.
Reduction of excess office space globally would increase the productivity of the company’s fixed cost-base and generate ongoing savings, while the workforce reduction has been designed to ensure that the company’s global workforce is properly aligned to "best serve the evolving needs of its clients and its business".
"The realignment of our senior-executive workforce will help ensure that Accenture has the right people, skills and capabilities, at the right levels and in the right places," the statement said.
Accenture expects net revenues for the fourth quarter of fiscal 2009 to be in the range of USD 5 billion-USD 5.2 billion, it added.
Chicago: Global management consulting and outsourcing company Accenture is reducing its senior executive workforce by seven percent besides, pruning real estate capacity as part of restructuring efforts.
Restructuring is expected to cost the company USD 247 million in the fourth quarter of fiscal 2009 ending August 31.
Of the costs, about USD 119 million would be related to reduction of excess office space globally and the remaining for severance and related costs of workforce reduction.
The seven percent workforce reduction would mean over 300 senior-executives would be laid-off.
"As part of our drive to deliver high performance... we are acting boldly to position Accenture better for both short-term and long-term economic improvement growth and profitability," Accenture Chairman and CEO William Green said in a statement today.
The New-York based company expects space reductions to be completed by end of the current fiscal and the workforce actions to be completed during the first quarter of fiscal year 2010.
Prior to the cut, the company had 4,800 senior-executive employees and a total of 177,000 employees globally.
Green said the company is taking steps to ensure that it has the right cost structure to support the business going forward.
Reduction of excess office space globally would increase the productivity of the company’s fixed cost-base and generate ongoing savings, while the workforce reduction has been designed to ensure that the company’s global workforce is properly aligned to "best serve the evolving needs of its clients and its business".
"The realignment of our senior-executive workforce will help ensure that Accenture has the right people, skills and capabilities, at the right levels and in the right places," the statement said.
Accenture expects net revenues for the fourth quarter of fiscal 2009 to be in the range of USD 5 billion-USD 5.2 billion, it added.
Big Outsources increase share
The biggest IT outsourcing companies grew their combined market share in Europe last year, as IT services remains a bright spot in the recession-hit technology sector, according to research by IDC.
The study showed that the 50 biggest service providers in Western Europe increased their share of the market by 9.7 per cent in 2008, from 53.4 per cent to 55.5 per cent of the sector – with their combined sales worth $152bn (£92bn).
The total Western European services market grew 5.3 per cent, based on local currencies, boosted by a double-digit increase in business process outsourcing, said IDC.
The figures compare favourably with the hardware and software sectors, both of which have been shown to have shrunk over the past year by a range of different research studies.
IDC also said that it expects there will be further consolidation in the outsourcing market, following on from major acquisitions such as HP’s purchase of EDS.
"With a few exceptions, most of the vendors in the top 50 ranking enjoyed growth driven by increased sales, combined with small acquisitions to strengthen their presence in specific geographies or industries, or to gain global sourcing capabilities," said IDC research manager Laura Converso.
The three fastest growing companies in the sector last year were Italian firm Gruppo Engineering, Steria and Indian outsourcer Wipro, while Tata Consultancy Services (TCS) became the first offshore firm to make it into the top 20 suppliers.
"Pure-play offshore vendors continue to quickly penetrate the European services market. TCS is the first so-called offshore provider to reach the top 20 IT services ranking, marking a symbolic breakthrough," said Converso.
The study showed that the 50 biggest service providers in Western Europe increased their share of the market by 9.7 per cent in 2008, from 53.4 per cent to 55.5 per cent of the sector – with their combined sales worth $152bn (£92bn).
The total Western European services market grew 5.3 per cent, based on local currencies, boosted by a double-digit increase in business process outsourcing, said IDC.
The figures compare favourably with the hardware and software sectors, both of which have been shown to have shrunk over the past year by a range of different research studies.
IDC also said that it expects there will be further consolidation in the outsourcing market, following on from major acquisitions such as HP’s purchase of EDS.
"With a few exceptions, most of the vendors in the top 50 ranking enjoyed growth driven by increased sales, combined with small acquisitions to strengthen their presence in specific geographies or industries, or to gain global sourcing capabilities," said IDC research manager Laura Converso.
The three fastest growing companies in the sector last year were Italian firm Gruppo Engineering, Steria and Indian outsourcer Wipro, while Tata Consultancy Services (TCS) became the first offshore firm to make it into the top 20 suppliers.
"Pure-play offshore vendors continue to quickly penetrate the European services market. TCS is the first so-called offshore provider to reach the top 20 IT services ranking, marking a symbolic breakthrough," said Converso.
IT Spending to fall faster
Spending on software and IT services will fall by 1.3 per cent to £39.5bn in 2009, according to figures from Pierre Audoin Consultants (PAC) and TechMarketView.
The figures are slightly worse than the one per cent decline forecast early in the year.
Many UK organisations have either frozen or cut their discretionary IT budgets, driving a 3.9 per cent drop in software investment and a 5.5 per cent decrease in project services spending.
The decline will be partially offset by a 3.1 per cent rise in outsourcing spend, as businesses aim to reduce their IT operating costs and focus on core, strategic activities.
Nick Mayes, analyst at PAC London, said the pipeline of new contract opportunities is expanding slowly, although clients continue to negotiate aggressively with suppliers.
"However, large suppliers with mature global delivery networks, intimate client relationships and annuity-based outsourcing businesses continue to fare better, as evident in the results of Logica, Atos Origin and Capgemini," he said.
The public sector remains the biggest spender on software and IT services, representing nearly 25 per cent of the UK market. It is also due to grow by 4.3 per cent this year to support border control and defence initiatives.
Spending under a prospective Tory government would not necessarily slow, according to Anthony Miller, managing partner at TechMarketView.
“There may well be a hiatus in kicking off new government IT projects pending the election,” he said.
“But whichever colour of party we see in government next year, we expect that the pace of outsourcing – and, dare we say, offshoring – will undoubtedly increase, more so with the Tories."
The industry sectors that will cut software and IT services investment the most severely this year are retail, services and manufacturing.
The figures are slightly worse than the one per cent decline forecast early in the year.
Many UK organisations have either frozen or cut their discretionary IT budgets, driving a 3.9 per cent drop in software investment and a 5.5 per cent decrease in project services spending.
The decline will be partially offset by a 3.1 per cent rise in outsourcing spend, as businesses aim to reduce their IT operating costs and focus on core, strategic activities.
Nick Mayes, analyst at PAC London, said the pipeline of new contract opportunities is expanding slowly, although clients continue to negotiate aggressively with suppliers.
"However, large suppliers with mature global delivery networks, intimate client relationships and annuity-based outsourcing businesses continue to fare better, as evident in the results of Logica, Atos Origin and Capgemini," he said.
The public sector remains the biggest spender on software and IT services, representing nearly 25 per cent of the UK market. It is also due to grow by 4.3 per cent this year to support border control and defence initiatives.
Spending under a prospective Tory government would not necessarily slow, according to Anthony Miller, managing partner at TechMarketView.
“There may well be a hiatus in kicking off new government IT projects pending the election,” he said.
“But whichever colour of party we see in government next year, we expect that the pace of outsourcing – and, dare we say, offshoring – will undoubtedly increase, more so with the Tories."
The industry sectors that will cut software and IT services investment the most severely this year are retail, services and manufacturing.
Profits up for IT Companies
Logica almost doubles profit for most recent half-year while CSC sees net income grow 5.5% despite revenue dip
Two IT services companies reported growing profits last week, providing some much-needed good news for the IT sector.
European IT services and BPO firm Logica grew pre-tax profits to £24 million for the second half of its financial year, up from £12 million for the same period last year. The company reported revenue growth of 6% (after correcting for the number of working days) to £1.87 billion, driven in the main by a 10% boost in outsourcing revenues.
At the same time, Logica cut the total number of subcontractors it employs by 20%. Beyond the 1,900 redundancies it has already declared, Logica said there would be no more job cuts for internal staff.
Meanwhile, US IT services and outsourcing company CSC managed to grow net income by 5.6% to $131 million for its most recent financial quarter, despite a decline in revenues of 12% to $3.9 billion.
CSC’s commercial outsourcing division and managed services arm each saw revenue fall steeply: by 22% to $840 million and by 17.6% to $1.56 billion respectively. These were tempered, however, by a 1.7% revenue increase for the North American public sector division to $1.52 billion.
The company also announced its intention to acquire the Brazilian division of bankrupt US management and technology consultancy BearingPoint. CSC described Brazil as South America’s “largest, most important and growing market”.
Two IT services companies reported growing profits last week, providing some much-needed good news for the IT sector.
European IT services and BPO firm Logica grew pre-tax profits to £24 million for the second half of its financial year, up from £12 million for the same period last year. The company reported revenue growth of 6% (after correcting for the number of working days) to £1.87 billion, driven in the main by a 10% boost in outsourcing revenues.
At the same time, Logica cut the total number of subcontractors it employs by 20%. Beyond the 1,900 redundancies it has already declared, Logica said there would be no more job cuts for internal staff.
Meanwhile, US IT services and outsourcing company CSC managed to grow net income by 5.6% to $131 million for its most recent financial quarter, despite a decline in revenues of 12% to $3.9 billion.
CSC’s commercial outsourcing division and managed services arm each saw revenue fall steeply: by 22% to $840 million and by 17.6% to $1.56 billion respectively. These were tempered, however, by a 1.7% revenue increase for the North American public sector division to $1.52 billion.
The company also announced its intention to acquire the Brazilian division of bankrupt US management and technology consultancy BearingPoint. CSC described Brazil as South America’s “largest, most important and growing market”.
In India, Global Crisis Is Not All Bad News
About 60 percent of India’s outsourcing business comes from the United States, and 40 percent of the work is in the banking, insurance and financial services sectors.
“We now have to look at other regions of the world, like Japan, the Middle East and the Nordic countries,” said Som Mittal, president of the National Association of Software and Services Companies, or Nasscom. “The current crisis has sharpened our realization that we cannot put all our eggs in the U.S. basket.”
Perhaps the biggest and most sustaining change has been its climb up the value chain of services in recent years — from back-office support functions to what the industry calls “knowledge process outsourcing,” which includes legal services, hardware network management and engineering design.
One of the country’s biggest technology companies, Bangalore-based Infosys, has been making a deliberate effort to scale back assembly-line software development and ramp up more technically complex services such as engineering design.
“It is a strategic shift we began making some years ago,” said S. Gopalakrishnan, the company’s chief executive officer. “Our efforts to expand our services to include high-end consulting, systems management and product engineering and design work may help weather the storm.”
Infosys’s fastest-growing business is in product and machine design for American aerospace, automobile and construction firms, but the company has also set up consulting businesses in China, the Middle East and Mexico.
Meanwhile, the legal services branch of India’s outsourcing industry is experiencing a boost as a direct result of the global crisis, as bankruptcies, mergers and acquisitions proliferate and demand grows for help with litigation.
“We now have to look at other regions of the world, like Japan, the Middle East and the Nordic countries,” said Som Mittal, president of the National Association of Software and Services Companies, or Nasscom. “The current crisis has sharpened our realization that we cannot put all our eggs in the U.S. basket.”
Perhaps the biggest and most sustaining change has been its climb up the value chain of services in recent years — from back-office support functions to what the industry calls “knowledge process outsourcing,” which includes legal services, hardware network management and engineering design.
One of the country’s biggest technology companies, Bangalore-based Infosys, has been making a deliberate effort to scale back assembly-line software development and ramp up more technically complex services such as engineering design.
“It is a strategic shift we began making some years ago,” said S. Gopalakrishnan, the company’s chief executive officer. “Our efforts to expand our services to include high-end consulting, systems management and product engineering and design work may help weather the storm.”
Infosys’s fastest-growing business is in product and machine design for American aerospace, automobile and construction firms, but the company has also set up consulting businesses in China, the Middle East and Mexico.
Meanwhile, the legal services branch of India’s outsourcing industry is experiencing a boost as a direct result of the global crisis, as bankruptcies, mergers and acquisitions proliferate and demand grows for help with litigation.
Outsourcing faces new era of scrutiny
Outsourcing faces new era of scrutiny
LONDON (Reuters) – Outsourcing, Indian-style, is challenged as never before by an erosion in business confidence that makes corporate spending, even to generate quick cost-savings, harder to justify.
“No New Investment” is the order of the day; cost avoidance, the mantra; zero percent, the growth target in the current era of uncertainty.
Software service providers emerged out of the 2000-2002 technology spending bust with sales growing up to 50 percent a year as they won over companies to contract out inefficient operations instead of managing them in-house.
But shocks to the world economy seen over the past 18 months are triggering reassessments of corporate growth expectations, cost considerations and operational accountability. It’s no longer safe to assume that the logic that drove outsourcing in the past will drive it again, once the economy picks up.
Here are reasons why the industry will find it difficult to repeat its past performance in the tough times ahead.
CUTTING BACK ON COST-CUTTING: The paradox at the moment is that spending on services meant to cut costs and save money is itself being squeezed.
Technology Partners International (TPI), a research firm that has tracked the outsourcing industry for 20 years, reported this week that total contract volumes fell 22 percent in the fourth quarter from a year ago.
Just how bad things could get this year is only likely to emerge as corporate customers nail down their 2009 spending plans to vendors in the next two to three months.
“The worst of the IT (information technology) spending slowdown likely remains in front of us as we start the clock on slashed 2009 budgets,” Goldman Sachs warned in a report on the software industry earlier this month.
The conventional wisdom is that companies will eventually need to cost-cut their way out of the economic morass. But as the software services industry has matured over this decade, Goldman analysts say the sector has become more cyclically dependent on overall IT spending, reducing the chances it will be an early winner in any corporate recovery.
Tata Consultancy Services, the largest of the Indian software service providers, estimates that budgets for IT outsourcing will fall between 5 and 20 percent during 2009. Market forecasters predict more declines in store for 2010.
KEY CUSTOMERS IN TROUBLE. One problem is that the $40 billion-a-year industry’s fortunes are heavily linked to the financial sector. Indeed outsourcing started out 30 years ago as a way to help banks automate tangled back-office operations.
But while it grew more diverse in the 1990s, branching into telecom, manufacturing, retail and other industries; banks, brokerages and insurers are still the biggest slice of the market at 20 percent of overall sales, Goldman Sachs estimates.
The finance sector is not just in trouble, it is experiencing a meltdown like no other since the 1970s or perhaps even the 1930s — long before outsourcing itself was invented. And while the credit crisis has left many institutions needing to slash costs, we are seeing a wholesale contraction of the market that will lead to steep reductions in overall demand. Whole parts of the business will disappear and not be replaced.
Moreover, the financial industry’s reliance on governments for bailouts has curtailed the autonomy of bosses. Governments are likely to be dubious should big banks and insurers seek to offshore financial jobs, especially in countries with mounting unemployment. Outsourcers may have to get used to having fewer, and more conservative, financial services customers.
LONDON (Reuters) – Outsourcing, Indian-style, is challenged as never before by an erosion in business confidence that makes corporate spending, even to generate quick cost-savings, harder to justify.
“No New Investment” is the order of the day; cost avoidance, the mantra; zero percent, the growth target in the current era of uncertainty.
Software service providers emerged out of the 2000-2002 technology spending bust with sales growing up to 50 percent a year as they won over companies to contract out inefficient operations instead of managing them in-house.
But shocks to the world economy seen over the past 18 months are triggering reassessments of corporate growth expectations, cost considerations and operational accountability. It’s no longer safe to assume that the logic that drove outsourcing in the past will drive it again, once the economy picks up.
Here are reasons why the industry will find it difficult to repeat its past performance in the tough times ahead.
CUTTING BACK ON COST-CUTTING: The paradox at the moment is that spending on services meant to cut costs and save money is itself being squeezed.
Technology Partners International (TPI), a research firm that has tracked the outsourcing industry for 20 years, reported this week that total contract volumes fell 22 percent in the fourth quarter from a year ago.
Just how bad things could get this year is only likely to emerge as corporate customers nail down their 2009 spending plans to vendors in the next two to three months.
“The worst of the IT (information technology) spending slowdown likely remains in front of us as we start the clock on slashed 2009 budgets,” Goldman Sachs warned in a report on the software industry earlier this month.
The conventional wisdom is that companies will eventually need to cost-cut their way out of the economic morass. But as the software services industry has matured over this decade, Goldman analysts say the sector has become more cyclically dependent on overall IT spending, reducing the chances it will be an early winner in any corporate recovery.
Tata Consultancy Services, the largest of the Indian software service providers, estimates that budgets for IT outsourcing will fall between 5 and 20 percent during 2009. Market forecasters predict more declines in store for 2010.
KEY CUSTOMERS IN TROUBLE. One problem is that the $40 billion-a-year industry’s fortunes are heavily linked to the financial sector. Indeed outsourcing started out 30 years ago as a way to help banks automate tangled back-office operations.
But while it grew more diverse in the 1990s, branching into telecom, manufacturing, retail and other industries; banks, brokerages and insurers are still the biggest slice of the market at 20 percent of overall sales, Goldman Sachs estimates.
The finance sector is not just in trouble, it is experiencing a meltdown like no other since the 1970s or perhaps even the 1930s — long before outsourcing itself was invented. And while the credit crisis has left many institutions needing to slash costs, we are seeing a wholesale contraction of the market that will lead to steep reductions in overall demand. Whole parts of the business will disappear and not be replaced.
Moreover, the financial industry’s reliance on governments for bailouts has curtailed the autonomy of bosses. Governments are likely to be dubious should big banks and insurers seek to offshore financial jobs, especially in countries with mounting unemployment. Outsourcers may have to get used to having fewer, and more conservative, financial services customers.
Saturday, August 15, 2009
China Strategist suggests to Break up India by 2015
Almost coinciding with the 13th round of Sino-Indian border talks (New Delhi [ Images ], August 7-8, 2009), an article (in the Chinese language) has appeared in China captioned 'If China takes a little action, the so-called Great Indian Federation can be broken up' (Zhong Guo Zhan Lue Gang, www.iiss.cn, Chinese, August 8, 2009).
Interestingly, it has been reproduced in several other strategic and military Web sites of the country and by all means, targets the domestic audience. The authoritative host site is located in Beijing [ Images ] and is the new edition of one, which so far represented the China International Institute for Strategic Studies (www.chinaiiss.org).
Claiming that Beijing's 'China-Centric' Asian strategy, provides for splitting India, the writer of the article, Zhan Lue (strategy), has found that New Delhi's corresponding 'India-Centric' policy in Asia, is in reality a 'Hindustan centric' one. Stating that on the other hand 'local centres' exist in several of the country's provinces (excepting for the UP and certain northern regions), Zhan Lue has felt that in the face of such local characteristics, the 'so-called' Indian nation cannot be considered as one having existed in history.
According to the article, if India today relies on any thing for unity, it is the Hindu religion. The partition of the country was based on religion. Stating that today nation states are the main current in the world, it has said that India could only be termed now as a 'Hindu religious state'. Adding that Hinduism is a decadent religion as it allows caste exploitation and is unhelpful to the country's modernisation, it described the Indian government as one in a dilemma with regard to eradication of the caste system as it realises that the process to do away with castes may shake the foundation of the consciousness of the Indian nation.
The writer has argued that in view of the above, China in its own interest and the progress of Asia, should join forces with different nationalities like the Assamese, Tamils, and Kashmiris and support the latter in establishing independent nation-States of their own, out of India. In particular, the ULFA (United Liberation Front of Asom) in Assam, a territory neighboring China, can be helped by China so that Assam realises its national independence.
The article has also felt that for Bangladesh, the biggest threat is from India, which wants to develop a great Indian Federation extending from Afghanistan to Myanmar. India is also targeting China with support to Vietnam's efforts to occupy Nansha (Spratly) group of islands in South China Sea.
Hence the need for China's consolidation of its alliance with Bangladesh, a country with which the US and Japan [ Images ] are also improving their relations to counter China.
It has pointed out that China can give political support to Bangladesh enabling the latter to encourage ethnic Bengalis in India to get rid of Indian control and unite with Bangladesh as one Bengali nation; if the same is not possible, creation of at least another free Bengali nation state as a friendly neighbour of Bangladesh, would be desirable, for the purpose of weakening India's expansion and threat aimed at forming a 'unified South Asia'.
The punch line in the article has been that to split India, China can bring into its fold countries like Pakistan, Nepal and Bhutan, support ULFA in attaining its goal for Assam's independence, back aspirations of Indian nationalities like the Tamils and Nagas, encourage Bangladesh to give a push to the independence of West Bengal [ Images ] and lastly recover the 90,000 sq km territory in southern Tibet [ Images ].
Wishing for India's break-up into 20 to 30 nation-States like in Europe, the article has concluded by saying that if the consciousness of nationalities in India could be aroused, social reforms in South Asia can be achieved, the caste system can be eradicated and the region can march along the road of prosperity.
The Chinese article in question will certainly outrage readers in India. Its suggestion that China can follow a strategy to dismember India, a country always with a tradition of unity in diversity, is atrocious, to say the least. The write-up could not have been published without the permission of the Chinese authorities, but it is sure that Beijing will wash its hands out of this if the matter is taken up with it by New Delhi.
It has generally been seen that China is speaking in two voices -- its diplomatic interlocutors have always shown understanding during their dealings with their Indian counterparts, but its selected media is pouring venom on India in their reporting. Which one to believe is a question confronting the public opinion and even policy makers in India.
In any case, an approach of panic towards such outbursts will be a mistake, but also ignoring them will prove to be costly for India.
D S Rajan, is Director, Chennai Centre for China Studies.
Interestingly, it has been reproduced in several other strategic and military Web sites of the country and by all means, targets the domestic audience. The authoritative host site is located in Beijing [ Images ] and is the new edition of one, which so far represented the China International Institute for Strategic Studies (www.chinaiiss.org).
Claiming that Beijing's 'China-Centric' Asian strategy, provides for splitting India, the writer of the article, Zhan Lue (strategy), has found that New Delhi's corresponding 'India-Centric' policy in Asia, is in reality a 'Hindustan centric' one. Stating that on the other hand 'local centres' exist in several of the country's provinces (excepting for the UP and certain northern regions), Zhan Lue has felt that in the face of such local characteristics, the 'so-called' Indian nation cannot be considered as one having existed in history.
According to the article, if India today relies on any thing for unity, it is the Hindu religion. The partition of the country was based on religion. Stating that today nation states are the main current in the world, it has said that India could only be termed now as a 'Hindu religious state'. Adding that Hinduism is a decadent religion as it allows caste exploitation and is unhelpful to the country's modernisation, it described the Indian government as one in a dilemma with regard to eradication of the caste system as it realises that the process to do away with castes may shake the foundation of the consciousness of the Indian nation.
The writer has argued that in view of the above, China in its own interest and the progress of Asia, should join forces with different nationalities like the Assamese, Tamils, and Kashmiris and support the latter in establishing independent nation-States of their own, out of India. In particular, the ULFA (United Liberation Front of Asom) in Assam, a territory neighboring China, can be helped by China so that Assam realises its national independence.
The article has also felt that for Bangladesh, the biggest threat is from India, which wants to develop a great Indian Federation extending from Afghanistan to Myanmar. India is also targeting China with support to Vietnam's efforts to occupy Nansha (Spratly) group of islands in South China Sea.
Hence the need for China's consolidation of its alliance with Bangladesh, a country with which the US and Japan [ Images ] are also improving their relations to counter China.
It has pointed out that China can give political support to Bangladesh enabling the latter to encourage ethnic Bengalis in India to get rid of Indian control and unite with Bangladesh as one Bengali nation; if the same is not possible, creation of at least another free Bengali nation state as a friendly neighbour of Bangladesh, would be desirable, for the purpose of weakening India's expansion and threat aimed at forming a 'unified South Asia'.
The punch line in the article has been that to split India, China can bring into its fold countries like Pakistan, Nepal and Bhutan, support ULFA in attaining its goal for Assam's independence, back aspirations of Indian nationalities like the Tamils and Nagas, encourage Bangladesh to give a push to the independence of West Bengal [ Images ] and lastly recover the 90,000 sq km territory in southern Tibet [ Images ].
Wishing for India's break-up into 20 to 30 nation-States like in Europe, the article has concluded by saying that if the consciousness of nationalities in India could be aroused, social reforms in South Asia can be achieved, the caste system can be eradicated and the region can march along the road of prosperity.
The Chinese article in question will certainly outrage readers in India. Its suggestion that China can follow a strategy to dismember India, a country always with a tradition of unity in diversity, is atrocious, to say the least. The write-up could not have been published without the permission of the Chinese authorities, but it is sure that Beijing will wash its hands out of this if the matter is taken up with it by New Delhi.
It has generally been seen that China is speaking in two voices -- its diplomatic interlocutors have always shown understanding during their dealings with their Indian counterparts, but its selected media is pouring venom on India in their reporting. Which one to believe is a question confronting the public opinion and even policy makers in India.
In any case, an approach of panic towards such outbursts will be a mistake, but also ignoring them will prove to be costly for India.
D S Rajan, is Director, Chennai Centre for China Studies.
Indian Companies Among Top Ten IT Infrastructure Outsourcers
Indian outsourcing companies figure among the top ten worldwide in IT infrastructure services, reflecting the growing appeal of offshore delivery of these services, according to outsourcing consultancy Technology Partners International (TPI).
Indian outsourcers figured in the top ten by value of contracts closed in the first half of this year, not only in their traditionally strong area of application development and maintenance (ADM), but also in infrastructure services, Siddharth Pai, a partner at TPI, said on Thursday.
That Indian companies such as HCL Technologies and Wipro have made it to the top ten in infrastructure services, a relatively new area in IT services for Indian outsourcers, suggests that customers are now considering seriously the option of remote delivery of these services from offshore locations like India, Pai said.
Indian companies figured in the top ten last year in ADM but not in infrastructure services, according to TPI data.
TPI released its index this week covering the global commercial outsourcing market in the second quarter and the first half of this year.
The market for outsourcing has shrunk to US$40.2 billion in contracts in the first half of this year from $51.5 billion in the first half of last year. TPI monitors contracts of a value of $25 million and above.
It is unlikely that the outsourcing market this year will grow to last year's level of $93.1 billion, and is more likely to end this year with total contracts of less than $80 billion, Pai said.
Top Indian outsourcers have reported flat or declining revenue in the quarter ended June 30. Infosys, India's second largest outsourcer, has forecast that revenue for its fiscal year ending March 31, 2010 will decline by 3.1 to 4.6 percent over revenue in the previous year.
Indian outsourcers figured in the top ten by value of contracts closed in the first half of this year, not only in their traditionally strong area of application development and maintenance (ADM), but also in infrastructure services, Siddharth Pai, a partner at TPI, said on Thursday.
That Indian companies such as HCL Technologies and Wipro have made it to the top ten in infrastructure services, a relatively new area in IT services for Indian outsourcers, suggests that customers are now considering seriously the option of remote delivery of these services from offshore locations like India, Pai said.
Indian companies figured in the top ten last year in ADM but not in infrastructure services, according to TPI data.
TPI released its index this week covering the global commercial outsourcing market in the second quarter and the first half of this year.
The market for outsourcing has shrunk to US$40.2 billion in contracts in the first half of this year from $51.5 billion in the first half of last year. TPI monitors contracts of a value of $25 million and above.
It is unlikely that the outsourcing market this year will grow to last year's level of $93.1 billion, and is more likely to end this year with total contracts of less than $80 billion, Pai said.
Top Indian outsourcers have reported flat or declining revenue in the quarter ended June 30. Infosys, India's second largest outsourcer, has forecast that revenue for its fiscal year ending March 31, 2010 will decline by 3.1 to 4.6 percent over revenue in the previous year.
Friday, August 7, 2009
MindTree Cuts Pay
Bangalore: Mindtree has been hit by global economic slowdown as it has cut salaries of some employees by 15 percent. These employees belong to research and development services unit (R&D) and had experience between one to seven years. "(Employee) utilization in the division has now fallen to 60 percent, so we have reduced pay by 15 percent for some staff. It is necessitated by the fact that utilization has been below the expected level," said Puneet Jetli, Senior Vice President and Head, Global People Function, Mindtree to SiliconIndia in a telephonic interview. The cut is applicable from August 1, 2009, and affect about 150-200 people out of the total 7800 employees.
Employees facing this decision are the ones who have been not on project for more than 30 days. Out of the six business unit in Mindtree, R&D unit has been hit hard due to economic slowdown. "R&D consists of customers who build product in technology sector. These customers are people who revolve around semiconductor industry. Semiconductor industry has been worst hit due to recession," says Jetli, who believes that in times like these their customer don't make many products, that's the reason why only R&D unit has been hit.
Jetli also added that there are two ways an employee facing pay cut can start getting his salary back. One is if they themselves start getting assigned to customer projects and the second is if the R&D unit crosses 65 percent utilization.
The company has reported revenue of Rs. 3.05 billion, up 36 percent from a year earlier. It also posted a net profit of Rs. 567.3 million in the June quarter. But in the quarter ended June 30, R&D contributed only 14.1 percent of Mindtree's revenue as compared to 17.7 percent in the previous quarter.
Many Indian software companies have been hit in past few quarters and customers in U.S. and Europe are looking for much cheaper options for product and services. Already, Tata Consultancy Services (TCS) and Infosys have reported a decline in staff numbers for the June quarter. Mahindra Satyam and Hexaware Technologies have asked few employees who are not working on active assignments to take a long leave. "We did not want to send people to virtual pool or layoff. So this is just the short term process. Some organizations have put their employees on 40-50 percent salary. We did not want to take any such drastic action," added Jetli.
If the situation does not improve in the R&D unit it is possible that number of people facing a pay cut might increase. At the company's first quarter results announcement last month, MindTree Chief Executive Krishnakumar Natarajan had predicted that the company expects the growth to be muted in the next few quarters. This move by Mindtree proves that the company might have to make many changes to fight and adapt to the slowdown in Indian IT sector.
Source: Silicon India
Employees facing this decision are the ones who have been not on project for more than 30 days. Out of the six business unit in Mindtree, R&D unit has been hit hard due to economic slowdown. "R&D consists of customers who build product in technology sector. These customers are people who revolve around semiconductor industry. Semiconductor industry has been worst hit due to recession," says Jetli, who believes that in times like these their customer don't make many products, that's the reason why only R&D unit has been hit.
Jetli also added that there are two ways an employee facing pay cut can start getting his salary back. One is if they themselves start getting assigned to customer projects and the second is if the R&D unit crosses 65 percent utilization.
The company has reported revenue of Rs. 3.05 billion, up 36 percent from a year earlier. It also posted a net profit of Rs. 567.3 million in the June quarter. But in the quarter ended June 30, R&D contributed only 14.1 percent of Mindtree's revenue as compared to 17.7 percent in the previous quarter.
Many Indian software companies have been hit in past few quarters and customers in U.S. and Europe are looking for much cheaper options for product and services. Already, Tata Consultancy Services (TCS) and Infosys have reported a decline in staff numbers for the June quarter. Mahindra Satyam and Hexaware Technologies have asked few employees who are not working on active assignments to take a long leave. "We did not want to send people to virtual pool or layoff. So this is just the short term process. Some organizations have put their employees on 40-50 percent salary. We did not want to take any such drastic action," added Jetli.
If the situation does not improve in the R&D unit it is possible that number of people facing a pay cut might increase. At the company's first quarter results announcement last month, MindTree Chief Executive Krishnakumar Natarajan had predicted that the company expects the growth to be muted in the next few quarters. This move by Mindtree proves that the company might have to make many changes to fight and adapt to the slowdown in Indian IT sector.
Source: Silicon India
Saturday, August 1, 2009
Indian IT the Trends on Emplyment
The Quarterly Results of Top Indian Companies are out, some of them have done well in terms of profit growth however what needs to be seen is that the employment numbers (Net Additions) for almost everyone is negligible or Negative.
The Big Indian IT Companies were growing at 30% plus in revenue terms and hiring 10,000-20,000 Freshers each, the attrition rate was also high as emplyees left for better opportunities elsewhere.
Now the situation has completely reversed, the number of emplyees has actually come down for most of the biggies rather than going up, this despite of the fact that fresher and lateral hiring in niche areas is still continuing, this infact lays bare the claim of these companies that they are not laying off.
For the IT worker this is a time for self realization, it is true that 20-30% of the workforce would be performing below performance standards and the weeds need to be rooted out, however the employees need to introspect and see themselves in the mirror, that instead of wasting the bench time on gossips and playing games if they had done technology upgradation of their skills they would still be having a job. The Emplyees are as much to blame for a layoff as no sensible company would throw out good people, and even if they are thrown out there are enough opportunities in the market to go to.
The Big Indian IT Companies were growing at 30% plus in revenue terms and hiring 10,000-20,000 Freshers each, the attrition rate was also high as emplyees left for better opportunities elsewhere.
Now the situation has completely reversed, the number of emplyees has actually come down for most of the biggies rather than going up, this despite of the fact that fresher and lateral hiring in niche areas is still continuing, this infact lays bare the claim of these companies that they are not laying off.
For the IT worker this is a time for self realization, it is true that 20-30% of the workforce would be performing below performance standards and the weeds need to be rooted out, however the employees need to introspect and see themselves in the mirror, that instead of wasting the bench time on gossips and playing games if they had done technology upgradation of their skills they would still be having a job. The Emplyees are as much to blame for a layoff as no sensible company would throw out good people, and even if they are thrown out there are enough opportunities in the market to go to.
A Post on Karnata Act: Severance Pay in case of lay off
Under Section 39 of Karnataka Shops and Commercial Establishments Act (which TCS will come under), it is illegal for an employer to dismiss anyone who has put in 6 months or more of service except for a “reasonable” cause and unless 1 months notice or salary is paid – except for cases of misconduct. Now (and this is the interesting part) if “no reasonable cause” or misconduct can be proven, then employer MUST pay one month’s pay for every year of service. Going by this, if you have been terminated without any reasonable cause or misconduct, then you should get at least 6 months pay! Another clause in this Act is about Right To Appeal. You can approach the Labor dept who is the appellate authority and if this fails, you can approach the District Judge. There are tons of cases where companies are made to pay higher severance packages where they wrongfully pay insufficient severance when they terminate an employee (but of course they have a right to terminate).
Is It legal to lay off in India?
Is firing by IT companies legal?
With the recession looming large, lot of Indian IT companies have resorted to firing their employees.
Does the indian law allow firing?
In terms of ID (Industrial Disputes Act, 1947) Act, if an industrial establishment employs more than 100 workmen, a company may not terminate the services of any workman who has been in continuous service for not less than one year unless the (i) workman has been given three months notice in writing indicating the reason for retrenchment and the period of notice, and (ii) the prior permission of the concerned state government has been obtained for the retrenchment (section 25N of the ID Act).
It is nearly impossible and companies seldom follow the legal procedure to terminate an employee. It has to be noted that the punishment for not following the above said law is either one month imprisonment or a fine of Rs.1000 or both.
How do companies get around the law?
The question whether software companies fall under the definition of 'Industry' as defined under the ID act is yet to be answered by the courts. Companies which have hardware units (viz. Motorolla, Samsung, HCL, Wipro, Siemens, etc.) may be termed as 'industries' and therefore may come within the perview of the ID act. Other companies which are pure software/services firms, may shy away from implementing the provisions of the ID act. However, if a case is taken up in court, it is for the court to decide on the matter.
What can the government do?
The government must enact a legislation to put an end to the ambiguity of whether a software company is an 'Industry' or not as per the ID act so that the law is clear and companies don't resort to the loopholes in the law to terminate employees indiscriminately.
What to do if you are fired
Never submit your resignation. If you resign, legally you are helpless. It becomes your own decision. You will also not be eligible for the basic notice period/pay as per the employment contract.
Seek legal assistance. Know your rights as an employee. Explore legal avenues.
Don't take it personally. Don't be on the defensive thinking that you are being fired because of your performance. The decision on whom to fire depends on several factors including employee cost, skill set and future direction of the company.
Speak to your boss. He may help you with contacts to get you a new job.
Negotiate severance benefits. If it has to come down to leaving the company, negotiate the severance benefit. Typically a 'caring' company should give 2/3 months salary and notice before asking you to leave.
Employer - How to handle downsizing
Never blame it on performance - Indian IT behemoths brand their firing exercise as 'weeding out non-performers'. This practice is a barbaric way of treating employees. They are not only causing injury by firing the employees but also rubbing salt on the wound by calling them poor-performers. Is one to believe that the so called 'non-performers' were never there during boom time? These companies' performance appraisals are often a one-man's judgement (the immediate boss) of the empolyee and are often biased and politically motivated.
Explain the situation - Employees are congizant of the fact that their company is going through a bad time. Non-availability of projects is the main motivator for firing employees. Acknowledge this fact. Make it clear that this the only reason for firing the employees.
Provide a good severance benefit - Going beyond the contractual obligation and offering a better deal to the employee being fired will help the company's reputation in the long run.
Never try to 'cover it up' - Employers all too often resort to asking the employee being fired to leave the company withing 2 hours in the hope that the news doesn't spread. This is traumatic and ridiculous and will hurt the company's reputation badly. Any news of firing spreads like wild-fire.
A chance to improve your reputation - Pradoxical it may seem but by firing employees in a proper way and by treating them with respect, companies actually improve their reputation. I have heard of employees saying "I like my earlier company. They not only paid 3 months of salary after asking us to look for other oppertunities, but also allowed us to stay at home or use the office facilities to enable us to look for a job. They really care for employees".
What do you think? Does your company follow a legal/sympathetic procedure for downsizing? How are you handling the situation as an employer/HR? Please leave a comment for further discussion.
With the recession looming large, lot of Indian IT companies have resorted to firing their employees.
Does the indian law allow firing?
In terms of ID (Industrial Disputes Act, 1947) Act, if an industrial establishment employs more than 100 workmen, a company may not terminate the services of any workman who has been in continuous service for not less than one year unless the (i) workman has been given three months notice in writing indicating the reason for retrenchment and the period of notice, and (ii) the prior permission of the concerned state government has been obtained for the retrenchment (section 25N of the ID Act).
It is nearly impossible and companies seldom follow the legal procedure to terminate an employee. It has to be noted that the punishment for not following the above said law is either one month imprisonment or a fine of Rs.1000 or both.
How do companies get around the law?
The question whether software companies fall under the definition of 'Industry' as defined under the ID act is yet to be answered by the courts. Companies which have hardware units (viz. Motorolla, Samsung, HCL, Wipro, Siemens, etc.) may be termed as 'industries' and therefore may come within the perview of the ID act. Other companies which are pure software/services firms, may shy away from implementing the provisions of the ID act. However, if a case is taken up in court, it is for the court to decide on the matter.
What can the government do?
The government must enact a legislation to put an end to the ambiguity of whether a software company is an 'Industry' or not as per the ID act so that the law is clear and companies don't resort to the loopholes in the law to terminate employees indiscriminately.
What to do if you are fired
Never submit your resignation. If you resign, legally you are helpless. It becomes your own decision. You will also not be eligible for the basic notice period/pay as per the employment contract.
Seek legal assistance. Know your rights as an employee. Explore legal avenues.
Don't take it personally. Don't be on the defensive thinking that you are being fired because of your performance. The decision on whom to fire depends on several factors including employee cost, skill set and future direction of the company.
Speak to your boss. He may help you with contacts to get you a new job.
Negotiate severance benefits. If it has to come down to leaving the company, negotiate the severance benefit. Typically a 'caring' company should give 2/3 months salary and notice before asking you to leave.
Employer - How to handle downsizing
Never blame it on performance - Indian IT behemoths brand their firing exercise as 'weeding out non-performers'. This practice is a barbaric way of treating employees. They are not only causing injury by firing the employees but also rubbing salt on the wound by calling them poor-performers. Is one to believe that the so called 'non-performers' were never there during boom time? These companies' performance appraisals are often a one-man's judgement (the immediate boss) of the empolyee and are often biased and politically motivated.
Explain the situation - Employees are congizant of the fact that their company is going through a bad time. Non-availability of projects is the main motivator for firing employees. Acknowledge this fact. Make it clear that this the only reason for firing the employees.
Provide a good severance benefit - Going beyond the contractual obligation and offering a better deal to the employee being fired will help the company's reputation in the long run.
Never try to 'cover it up' - Employers all too often resort to asking the employee being fired to leave the company withing 2 hours in the hope that the news doesn't spread. This is traumatic and ridiculous and will hurt the company's reputation badly. Any news of firing spreads like wild-fire.
A chance to improve your reputation - Pradoxical it may seem but by firing employees in a proper way and by treating them with respect, companies actually improve their reputation. I have heard of employees saying "I like my earlier company. They not only paid 3 months of salary after asking us to look for other oppertunities, but also allowed us to stay at home or use the office facilities to enable us to look for a job. They really care for employees".
What do you think? Does your company follow a legal/sympathetic procedure for downsizing? How are you handling the situation as an employer/HR? Please leave a comment for further discussion.
Microsoft to cut 1% Workforce in India
Software giant Microsoft announced its plans to cut 1% of its Indian staff as its net income declined 11% during the December quarter because of worldwide economic slowdown.
The declaration on this is part of the Redmond-based company's decision taken during January 2009 to slash around 5,000 jobs worldwide by June 2010 in order to save up to $700 million (Rs 3,500 crore).
The job cuts in India are part of the second round.
In India, the company's decision will impact around 55 people across Microsoft's six-business divisions spread across Bangalore, Delhi and Hyderabad.
In a major declaration, the company said, "Due to a global realignment of our business priorities, about one percent of the net rolls across India are likely to be impacted. These adjustments reflect the necessary changes to ensure that the right resources are focused on the right priorities."
When asked to give detailed information, the company's spokesperson declined to comment saying "We are currently working with the concerned employees to evaluate alternative positions internally and where applicable look at mutually favourable disengagement terms."
In a 10-Q filing to the Securities Exchange Commission on April 23, Microsoft said that it had reserved around Rs 1,200 crore for severance for 3,400 laid-off employees, "all of whom are expected to leave the company by June 30, 2010".
By: News
The declaration on this is part of the Redmond-based company's decision taken during January 2009 to slash around 5,000 jobs worldwide by June 2010 in order to save up to $700 million (Rs 3,500 crore).
The job cuts in India are part of the second round.
In India, the company's decision will impact around 55 people across Microsoft's six-business divisions spread across Bangalore, Delhi and Hyderabad.
In a major declaration, the company said, "Due to a global realignment of our business priorities, about one percent of the net rolls across India are likely to be impacted. These adjustments reflect the necessary changes to ensure that the right resources are focused on the right priorities."
When asked to give detailed information, the company's spokesperson declined to comment saying "We are currently working with the concerned employees to evaluate alternative positions internally and where applicable look at mutually favourable disengagement terms."
In a 10-Q filing to the Securities Exchange Commission on April 23, Microsoft said that it had reserved around Rs 1,200 crore for severance for 3,400 laid-off employees, "all of whom are expected to leave the company by June 30, 2010".
By: News
Will Cisco Lay off 600 More
Another round of employees at Cisco Systems reportedly got pink slips Thursday, as the company laid off several hundred employees as part of its plan to cut costs and realign its business.
The Wall Street Journal reported Friday that between 600 and 700 Cisco employees were laid off at the company’s headquarters in San Jose, Calif. The company also cut jobs at branch offices in other parts of the U.S. The Wall Street Journal cited sources close to the company.
A spokesman for the company told the Wall Street Journal that Cisco was “doing everything possible to minimize the impact on employees affected by the limited restructuring.”
Like all companies, Cisco, which makes networking equipment that runs the Internet and provides communications for large companies, has seen sales slump as a result of the global recession. The company said earlier this year that it would likely cut between 1,500 and 2,000 jobs as it realigned its business to focus on newer more profitable business segments. The cuts were expected to be completed at the end of the company’s fiscal year, which ends this month.
In February, Cisco said it cut about 250 jobs at its San Jose headquarters. Cisco had 66,558 employees at the end of April. Despite the cuts, Cisco’s CEO John Chambers has said publicly that he believes the worst of the recession is over. But he noted that it could take some time before spending returns to high levels. Wall Street will be watching the company’s next earnings call very carefully to see signs that the bottom has been reached. Cisco will report fiscal fourth quarter and end of year earnings on August 5 after the market closes.
Source : Cnet
The Wall Street Journal reported Friday that between 600 and 700 Cisco employees were laid off at the company’s headquarters in San Jose, Calif. The company also cut jobs at branch offices in other parts of the U.S. The Wall Street Journal cited sources close to the company.
A spokesman for the company told the Wall Street Journal that Cisco was “doing everything possible to minimize the impact on employees affected by the limited restructuring.”
Like all companies, Cisco, which makes networking equipment that runs the Internet and provides communications for large companies, has seen sales slump as a result of the global recession. The company said earlier this year that it would likely cut between 1,500 and 2,000 jobs as it realigned its business to focus on newer more profitable business segments. The cuts were expected to be completed at the end of the company’s fiscal year, which ends this month.
In February, Cisco said it cut about 250 jobs at its San Jose headquarters. Cisco had 66,558 employees at the end of April. Despite the cuts, Cisco’s CEO John Chambers has said publicly that he believes the worst of the recession is over. But he noted that it could take some time before spending returns to high levels. Wall Street will be watching the company’s next earnings call very carefully to see signs that the bottom has been reached. Cisco will report fiscal fourth quarter and end of year earnings on August 5 after the market closes.
Source : Cnet
British Telecom to cut 2,750 call center jobs in India
British telecom giant BT will transfer more than 2,000 call centre jobs from India back to the UK, chief executive Ian Livingston revealed during the firm's annual general meeting at the Barbican Centre in London.
BT will transfer at least 2,000 jobs to Britain from India, where it employs 11,000 customer service staff. However, the eventual number of job cuts in call centres will be closer to 2,750, representing half the group's 5,500 call-centre staff in India, the Times reported on Thursday.
The firm, however, insisted that its move had nothing to do with the quality of service offered in India. "This is not about customer service, as the service in our operations around the globe is of very similar standards. It is about the effective deployment of our resources. We have opportunities to bring some activities, carried out by our partners, back from outside the UK to permanent BT employees in the UK who are skilled to do this work," a company spokesperson said.
The pullout of jobs from India would be phased with no specific timescale set for the transfer of jobs. "This is part of a long-term strategy to reduce costs and the dependency on third parties globally," the spokesperson added.
Industry watchers in Bengaluru said the move would keep the local population, struggling with a deep recession, happy. Unemployment in the UK is at its highest in the last one decade and salaries have dropped - so has India's cost advantage.
Managing partner of consulting firm Browne & Mohan Dr. T.R. Madan Mohan says that while Indian firms charge about $18 per resource, in the UK charges have dropped to $22-23 per resource from $33 in December last year. "However, technology work, which requires high skills, may continue to be outsourced. BT had axed 6000 jobs last year in the UK and much of this work came to Tech Mahindra and HCL," he says.
The firm, he adds, was looking at more high-end outsourcing and may consider players such as Patni, HCL, Infosys, and Subex.
The primary hit for Indian IT services vendors - mostly the top five players - will come when low-end work contracts are not renewed next year, says engagement manager with Zinnov Karthik Ananth. A spokesperson said that by next year, approximately 4,000 less people will be contracted in India than was the case in early 2008.
"The BT Global Business Services division, which mainly offshored to APAC countries, has been a loss making unit. The rationalisation of headcount would be to cut costs and scale down operations," he says.
In May, BT had announced that it will cut 15,000 more jobs this year after it reported a pre-tax loss of £1.34bn for the 12 months till March 31.The telecom giant had cut 15,000 jobs last year.
Last year, the majority of the job cuts were in the area of indirect labour, including agency, contractors, subcontractors and offshore workers, including those based in India. The telecom giant has a global workforce of 150,000 and employs 90,000 directly in the UK.
The firm has steered clear of compulsory layoffs in Britain and hoped to cut the jobs through natural wastage and voluntary redundancies.
Source: Asian Age
BT will transfer at least 2,000 jobs to Britain from India, where it employs 11,000 customer service staff. However, the eventual number of job cuts in call centres will be closer to 2,750, representing half the group's 5,500 call-centre staff in India, the Times reported on Thursday.
The firm, however, insisted that its move had nothing to do with the quality of service offered in India. "This is not about customer service, as the service in our operations around the globe is of very similar standards. It is about the effective deployment of our resources. We have opportunities to bring some activities, carried out by our partners, back from outside the UK to permanent BT employees in the UK who are skilled to do this work," a company spokesperson said.
The pullout of jobs from India would be phased with no specific timescale set for the transfer of jobs. "This is part of a long-term strategy to reduce costs and the dependency on third parties globally," the spokesperson added.
Industry watchers in Bengaluru said the move would keep the local population, struggling with a deep recession, happy. Unemployment in the UK is at its highest in the last one decade and salaries have dropped - so has India's cost advantage.
Managing partner of consulting firm Browne & Mohan Dr. T.R. Madan Mohan says that while Indian firms charge about $18 per resource, in the UK charges have dropped to $22-23 per resource from $33 in December last year. "However, technology work, which requires high skills, may continue to be outsourced. BT had axed 6000 jobs last year in the UK and much of this work came to Tech Mahindra and HCL," he says.
The firm, he adds, was looking at more high-end outsourcing and may consider players such as Patni, HCL, Infosys, and Subex.
The primary hit for Indian IT services vendors - mostly the top five players - will come when low-end work contracts are not renewed next year, says engagement manager with Zinnov Karthik Ananth. A spokesperson said that by next year, approximately 4,000 less people will be contracted in India than was the case in early 2008.
"The BT Global Business Services division, which mainly offshored to APAC countries, has been a loss making unit. The rationalisation of headcount would be to cut costs and scale down operations," he says.
In May, BT had announced that it will cut 15,000 more jobs this year after it reported a pre-tax loss of £1.34bn for the 12 months till March 31.The telecom giant had cut 15,000 jobs last year.
Last year, the majority of the job cuts were in the area of indirect labour, including agency, contractors, subcontractors and offshore workers, including those based in India. The telecom giant has a global workforce of 150,000 and employs 90,000 directly in the UK.
The firm has steered clear of compulsory layoffs in Britain and hoped to cut the jobs through natural wastage and voluntary redundancies.
Source: Asian Age
Lower Salaries for Laid of Techies
Bangalore: Till a few months ago, IT professional T.V. George was earning Rs.70,000 per month, plus perks. But after losing his high-paying job, and being unemployed for three months, George, 31, has started giving tuitions in mathematics and physics to aspiring engineering students in his neighbourhood.
"Now, I am earning Rs.15,000 per month. It's been hard. I got married only a few months before losing my job. So, when I lost my job, I was in a difficult position. Thankfully, I had some savings. With the savings, I am paying my rent and for a few other necessities," George, who was employed with a top U.S. IT company, told IANS.
"After losing my job, I tried my best to get a new job. But I remained unlucky. So to help run my home, I decided to give coaching classes to aspiring engineering students."
George is not alone. Recession has hit the IT sector in Bangalore, with scores of techies losing their jobs. Some have been forced to take up low-paying jobs as they wait to bounce back when the recession ends.
Dipankar Dutta, 27, working with an Indian IT company as software engineer, lost his job almost eight months ago.
Today he has a job, but as a content writer in a tech firm.
"Thankfully, writing has been my forte. So, I landed this job of a content writer. Otherwise I would have been in a soup. Since I cannot afford to stay in Bangalore without a job, I compromised and settled for the new job with a much lower pay package," said Dutta.
Scores of IT and ITES professionals in Bangalore have lost their jobs in recent times, an effect of the global economic meltdown. But there is no precise count of the numbers.
According to the latest employment and business outlook report by Bangalore-based staffing firm Teamlease, at 23 percent the attrition rate in this city is higher than in any other city in India.
The report was based on interviews with HR heads, CEOs and senior executives of 495 companies in Bangalore, Chennai, Hyderabad, Kolkata and Pune.
"The city accounted for the highest attrition rate. IT accounts for over 80 percent of the city's total labour pool. The attrition rate was 23 percent in the last quarter, against the previous quarter's 16 percent. Much of the attrition could be involuntary attrition (or layoffs)," Teamlease General Manager Surabhi Mathur-Gandhi said.
India's Silicon Valley has seen thousands of people getting pink slips in recent months. And many more are under the threat of losing their jobs.
"It's painful to lose your job, in today's expensive world. Those who have lost their jobs are desperate now, thus they are settling for low paying jobs," Karthik Shekhar, General Secretary of UNITES-Professionals, an unrecognised union of IT/Call Centre/BPO employees, told IANS.
"Every day we meet young men and women who have lost their IT jobs recently. All they want is a job. But getting a job in the IT sector is very difficult. So, they have no option but to settle for jobs outside their fields and that too with low paying packages," Shekhar added.
It's encouraging that today's youths are ready to move ahead in their lives. Instead of waiting for the economy to revive, IT professionals have started exploring other fields and this is a positive sign," said B.N. Gangadhar, professor of psychiatry at the National Institute of Mental Health and Neuro Sciences (Nimhans), Bangalore.
Mohammed Khan, a trained software engineer, told IANS: "Initially it was difficult, but I am happy with my choice. After losing my job with an IT firm, now I am working as a sales executive. I am hoping the economy will recover soon and all the techies who have lost their jobs will get new jobs in their field."
Source: IANS
"Now, I am earning Rs.15,000 per month. It's been hard. I got married only a few months before losing my job. So, when I lost my job, I was in a difficult position. Thankfully, I had some savings. With the savings, I am paying my rent and for a few other necessities," George, who was employed with a top U.S. IT company, told IANS.
"After losing my job, I tried my best to get a new job. But I remained unlucky. So to help run my home, I decided to give coaching classes to aspiring engineering students."
George is not alone. Recession has hit the IT sector in Bangalore, with scores of techies losing their jobs. Some have been forced to take up low-paying jobs as they wait to bounce back when the recession ends.
Dipankar Dutta, 27, working with an Indian IT company as software engineer, lost his job almost eight months ago.
Today he has a job, but as a content writer in a tech firm.
"Thankfully, writing has been my forte. So, I landed this job of a content writer. Otherwise I would have been in a soup. Since I cannot afford to stay in Bangalore without a job, I compromised and settled for the new job with a much lower pay package," said Dutta.
Scores of IT and ITES professionals in Bangalore have lost their jobs in recent times, an effect of the global economic meltdown. But there is no precise count of the numbers.
According to the latest employment and business outlook report by Bangalore-based staffing firm Teamlease, at 23 percent the attrition rate in this city is higher than in any other city in India.
The report was based on interviews with HR heads, CEOs and senior executives of 495 companies in Bangalore, Chennai, Hyderabad, Kolkata and Pune.
"The city accounted for the highest attrition rate. IT accounts for over 80 percent of the city's total labour pool. The attrition rate was 23 percent in the last quarter, against the previous quarter's 16 percent. Much of the attrition could be involuntary attrition (or layoffs)," Teamlease General Manager Surabhi Mathur-Gandhi said.
India's Silicon Valley has seen thousands of people getting pink slips in recent months. And many more are under the threat of losing their jobs.
"It's painful to lose your job, in today's expensive world. Those who have lost their jobs are desperate now, thus they are settling for low paying jobs," Karthik Shekhar, General Secretary of UNITES-Professionals, an unrecognised union of IT/Call Centre/BPO employees, told IANS.
"Every day we meet young men and women who have lost their IT jobs recently. All they want is a job. But getting a job in the IT sector is very difficult. So, they have no option but to settle for jobs outside their fields and that too with low paying packages," Shekhar added.
It's encouraging that today's youths are ready to move ahead in their lives. Instead of waiting for the economy to revive, IT professionals have started exploring other fields and this is a positive sign," said B.N. Gangadhar, professor of psychiatry at the National Institute of Mental Health and Neuro Sciences (Nimhans), Bangalore.
Mohammed Khan, a trained software engineer, told IANS: "Initially it was difficult, but I am happy with my choice. After losing my job with an IT firm, now I am working as a sales executive. I am hoping the economy will recover soon and all the techies who have lost their jobs will get new jobs in their field."
Source: IANS
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