HYDERABAD: Wipro Technologies, the country’s third largest IT services exporter, has decided not to hire fresh recruits till demand picks up.Pratik Kumar, executive VP (human resources) Wipro admitted that there were delays in bringing on board campus recruits for the next fiscal.
“None of the IT services firms is hiring and Wipro is not an exception. We will not be hiring till demand picks up. While we will honour all offers that we have made to campus recruits in 2008-09, there can be some delay in bringing them on board,” he said. The global economic slowdown has forced most IT services firms to go slow on hiring.
Wipro has issued about 8,000 offer letters to campus recruits in 2008-09. Generally, these recruits will be absorbed by the firm in 2009-10. “We may not be able to bring all of them on board in FY10. But we are in constant communication with them on when they can join the firm. Besides, we are looking at providing some avenues to keep them occupied,” he said.
Wipro Technologies has taken up a slew of measures to cut cost. “We have adopted about 30 measures to cut cost and most of them are related to increasing operational efficiency. We believe that we can improve our utilisation levels by a couple of points,” he said.
The utilisation rate at Wipro’s global IT business has been steadily rising and at the end of the third quarter, stood at 79.4%. In the third quarter of current fiscal (FY09), Wipro recorded consolidated revenue of Rs 6,634.3 crore, while the firm’s IT services business revenue were at Rs 5,079 crore. The firm, however, is still high on taining and faculties and skill upgradation. Wipro’s not for profit trust Mission 10X has partnered with Hyderabad-based Jawaharlal Nehru Technological University (JNTU) for conducting faculty enablement programmes.
Saturday, March 14, 2009
Friday, March 13, 2009
Barack Obama’s anti-outsourcing stance concerns India
Barack Obama’s anti-outsourcing stance concerns India
American President, Barack Obama’s anti-outsourcing movement came as a big blow to the Indian IT Industry. Of the total foreign currency earned by the Indian IT sector, 60% ($64 billion) comes from outsourcing. At present, about 1,000 American companies have shifted their jobs in abroad. Barack Obama, in his first US Congress session on February 25, 2009, said that his government would give tax breaks to companies that would retain jobs in US and vice versa. This would badly hit the American companies that have outsourced jobs in abroad.
Kamal Nath, India’s Minister of Commerce and Industry, said that he will clarify this issue with Washington. Indian government will also discuss this anti-outsourcing movement in the World Trade Organization. Mr. Nath said that his government would make sure that America’s movement is compatible with WTO when they had been talking about bi-lateral trade and movements of goods, people and services. He also said that one has to see how the US companies are using India as a base for technological development. It can not shutdown instantly.
Moreover, the US companies that are receiving bail out money would not be able to hire employees through the H-1B visa which is another major blow to the thriving Indian IT industry. As per his election agenda, Obama started this outsourcing movement to retain jobs in USA. The US President has also set goals to creat 3.5 million jobs in the country.
Obama’s decision upset the heads IT companies in India. Kris Gopalakrishnan, CEO, Infosys, said that outsourcing increased the competitiveness of US companies and it created more jobs inside the country. Ashok Soota, CMD, MindTree, said that Obama’s speech was an extension of what he had said in his campaigns. Sujata Rakhra, Vice President, Marketing and Communication, APAC, Perot Systems said that businesses today are truly global than ever before and such protectionalist measures would not only restrict innovation but would also hamper the progress of globalization.
Along with Indian IT companies, this new decision also upset many US companies that are saying that such a move would hurt US.
American President, Barack Obama’s anti-outsourcing movement came as a big blow to the Indian IT Industry. Of the total foreign currency earned by the Indian IT sector, 60% ($64 billion) comes from outsourcing. At present, about 1,000 American companies have shifted their jobs in abroad. Barack Obama, in his first US Congress session on February 25, 2009, said that his government would give tax breaks to companies that would retain jobs in US and vice versa. This would badly hit the American companies that have outsourced jobs in abroad.
Kamal Nath, India’s Minister of Commerce and Industry, said that he will clarify this issue with Washington. Indian government will also discuss this anti-outsourcing movement in the World Trade Organization. Mr. Nath said that his government would make sure that America’s movement is compatible with WTO when they had been talking about bi-lateral trade and movements of goods, people and services. He also said that one has to see how the US companies are using India as a base for technological development. It can not shutdown instantly.
Moreover, the US companies that are receiving bail out money would not be able to hire employees through the H-1B visa which is another major blow to the thriving Indian IT industry. As per his election agenda, Obama started this outsourcing movement to retain jobs in USA. The US President has also set goals to creat 3.5 million jobs in the country.
Obama’s decision upset the heads IT companies in India. Kris Gopalakrishnan, CEO, Infosys, said that outsourcing increased the competitiveness of US companies and it created more jobs inside the country. Ashok Soota, CMD, MindTree, said that Obama’s speech was an extension of what he had said in his campaigns. Sujata Rakhra, Vice President, Marketing and Communication, APAC, Perot Systems said that businesses today are truly global than ever before and such protectionalist measures would not only restrict innovation but would also hamper the progress of globalization.
Along with Indian IT companies, this new decision also upset many US companies that are saying that such a move would hurt US.
Obama: Virginia Tech Slaughter: Older News
Taken from a speech today from Barack Obama, isn't just ignorant, it's exploitative and offensive:
"There's also another kind of violence that we're going to have to think about. It's not necessarily the physical violence, but the violence that we perpetrate on each other in other ways," he said, and goes on to catalogue other forms of "violence."
There's the "verbal violence" of Imus.
There's "the violence of men and women who have worked all their lives and suddenly have the rug pulled out from under them because their job is moved to another country."
Ugh. Words aren't violence. And to suggest they are betrays a nonchalance about the First Amendment that's rather disturbing (but not surprising given the generally hysterical reactions to Imus). After all, if words are as bad as guns, if Imus' comments were even remotely comparable to the Virginia Tech slaughter, then words, like guns, should be heavily regulated,
right? Or even banned?
The outsourcing line was even worse. No one has the "right" to be paid by someone else for their labor. Employment in a free market is peaceful and voluntary, on both sides. So is the decision to stop that agreement, both for the laborer, who may find a better job, or for the employer, who may find someone who can do the job better, or cheaper, or both. There's nothing remotely violent about any of it.
To compare a business decision to employ cheaper labor to the senseless slaughter of innocents--even if by way of tortured, nonsensical metaphor--is really reprehensible. It reeks of exploitation. "See, the people who are really upset about this massacre, the people who really care about the victims, they vote for me, and take the same position I do on controversial issues."
Also, does this also make the poor people in developing countries who take outsourced jobs complicit in the "violence?"
Jesus. Couldn't the politicians wait a full 48 hours before propping up the dead for campaign speeches?
"There's also another kind of violence that we're going to have to think about. It's not necessarily the physical violence, but the violence that we perpetrate on each other in other ways," he said, and goes on to catalogue other forms of "violence."
There's the "verbal violence" of Imus.
There's "the violence of men and women who have worked all their lives and suddenly have the rug pulled out from under them because their job is moved to another country."
Ugh. Words aren't violence. And to suggest they are betrays a nonchalance about the First Amendment that's rather disturbing (but not surprising given the generally hysterical reactions to Imus). After all, if words are as bad as guns, if Imus' comments were even remotely comparable to the Virginia Tech slaughter, then words, like guns, should be heavily regulated,
right? Or even banned?
The outsourcing line was even worse. No one has the "right" to be paid by someone else for their labor. Employment in a free market is peaceful and voluntary, on both sides. So is the decision to stop that agreement, both for the laborer, who may find a better job, or for the employer, who may find someone who can do the job better, or cheaper, or both. There's nothing remotely violent about any of it.
To compare a business decision to employ cheaper labor to the senseless slaughter of innocents--even if by way of tortured, nonsensical metaphor--is really reprehensible. It reeks of exploitation. "See, the people who are really upset about this massacre, the people who really care about the victims, they vote for me, and take the same position I do on controversial issues."
Also, does this also make the poor people in developing countries who take outsourced jobs complicit in the "violence?"
Jesus. Couldn't the politicians wait a full 48 hours before propping up the dead for campaign speeches?
Tax Subsidies Abolished for Outsourcers:Barack Obama
On Tuesday night in Washington, US President Barack Obama proposed abolishing tax subsidies for American companies who outsource work offshore. It may be premature to start a heated debate on the nine words he devoted to this issue in a fairly long speech to a joint session of the US Congress, but it is necessary to establish the fact that in the real world his intentions may well remain only a paper promise.It’s somewhat as feasible as commanding a rollback of the tides!
Outsourcing, shorn of all its political and cultural contexts, is a business requirement, pure and simple. It is necessary for companies to retain competitiveness and enhance shareholder value, and no amount of administrative fiats can reverse or stall a commercial entity’s drive to do so.
Punitive measures in the United States to reduce outsourcing will no doubt affect Indian technology firms in the short term. Even now, a major chunk of revenue for these companies flow in from the US, and any protectionist measure will undoubtedly have a negative impact on the fiscal health as well as market capitalisation of Indian IT companies.
However, in the long run, it will prove to be more of an opportunity for sustained growth. Indian companies will start seriously exploring and tapping other markets to broaden their client base. Companies in the larger non-American world too need to enhance competitiveness and increase returns for stakeholders, and outsourcing is an essential tool they will need to do so. And it is difficult to think of a stronger vendor than India for such services globally.
Unfortunately for American companies, President Obama’s plans may actually end up damaging their long-term prospects far more than the short-term effects on Indian technology service providers. The competitiveness of US companies is bound to suffer in a globalised economy as well as diminish the returns they in turn can pass on to their stakeholders.
US companies will have to make a hard choice at this stage. No outsourcing means companies will have to strictly regulate their overheads, and be prepared to face far greater competitive pressure. Either way, their profit margins will take a dip.
Therefore, the main negative fallout of Mr Obama’s proposal will be on the very firms that he wishes to encourage to hire more Americans and at the expense of the American stakeholders of these companies.Earlier, the Bush administration had argued that tax cuts and deregulation actually prevent American firms from needlessly exporting jobs, even though US regulations were weaker and corporate tax rates lower than those in most other countries.
The argument also was that the efficiency of US capital would increase through optimal outsourcing policies and practices by rewarding companies with tax breaks for outsourcing work. These companies become more competitive globally and are also able to improve their bottomlines and enhance shareholder returns. President Obama’s proposal to end tax subsidies for outsourcing companies fly against the face of these arguments, and are also extremely unlikely to significantly reduce the lure of labour arbitrage.
For most companies the decision to outsource is not an easy one, and it only gets tougher when you have no option but to farm out services to a third party purely for economic reasons. But apart from the cost factor, there are other compelling reasons for outsourcing. The other main factor is the availability and use of technology.
Historically, companies have found it hard to manage advanced technologies over which they had no control. They were unable to update or provide technology solutions to critical business requirements in spite of having access to the right technology. In such a situation, it made sense to move out those jobs to places where it finds the right balance with the latest technologies that suited their business model.
This is one of the main reasons why outsourcing gained so much credibility and momentum over the past years.When you base taxation policy on populist expediency and not on sound economics or even ground reality, companies might stay for some time but when the going gets really tough they will relocate to places where they get tax incentives. They go where they can make money and that is sound business, if not sensible economics.
When you take away the tax cuts, you accelerate that process much more instead of stemming it.The key deciding factor here will be the cost of quality labour in the preferred outsourcing destinations. If US companies find that even with the added tax liability factored in, the cost of outsourced labour is cheaper than US labour, they will continue to outsource. Executive fiat or not.
For Indian IT-enabled services and BPO firms, this means more severe pressure on their margins and sustained labour cost control. This also means that the Indian vendors have to start investing heavily in strengthening internal operational processes and governance systems that can closely track the delivery efficiency of their organisations.
Mphasis May hir more Americans: Outsourcing
Mumbai: MphasiS Ltd, the Bangalore-based IT services firm that is now a part of international technology giant Hewlett-Packard, may add more Americans to its workforce to avail the tax breaks announced by US President Barack Obama on February 25.
Speaking to DNA Money, Ganesh Ayyar, chief executive officer, MphasiS Ltd, said, "The option of increasing Americans in our workforce is open to us in view of the recent announcements by US authorities. However, we will have to factor in many other things before that, like onsite cost versus margins. We also have to evaluate client willingness."
However, an analyst tracking the sector felt IT companies talking of recruiting more Americans and actually walking the talk were two different things. "Putting more people onsite will send their costs soaring. Moreover, clients might not be willing to pay that much," he said on the condition of anonymity. The analyst, however, added that MphasiS earns 94% of its revenues through time and material (T&M) contracts and so, is in the position to renegotiate contracts if onsite postings increase.
Of the 29,988 employees the company has, 1,721 work onsite, with the rest being offshore. As much as three-fourth of the company's revenues comes from offshore work, with onsite contributing the rest. MPhasiS' billing rate for onsite is about $71 per hour and for offshore, $17.
The US region contributed 67% to its revenues in the first quarter (November-January) of financial year 2008-09. MphasiS follows a November to October fiscal. In Q1, Europe, India and the Middle East and Asia Pacific accounted for 22%, 7% and 4% of revenues, respectively.
Its parent Hewlett-Packard, through its acquisition of US-based EDS Corporation, contributed 45% to MphasiS' revenues in the first quarter. "This is the first time we have taken into account business from Hewlett-Packard in our books after the acquisition. We will definitely look to increase its contribution further, because the EDS-Hewlett Packard combine too has grown five times in revenues. So, the relationship holds huge potential for us," said Ayyar. MphasiS gets outsourcing and infrastructure solutions projects from Hewlett-Packard.
Meanwhile, in these times of price negotiations from clients, the company may look at increasing the work hours of employees for cost benefits. However, Ayyar said, "Nothing of that sort is in practice at the moment." MphasiS added 9 new clients in its first quarter, including six through the Hewlett-Packard relationship. The company's revenues stood at Rs 9,77.7 crore in the first quarter of FY09, compared with Rs 8,94.72 crore in the quarter before that.
However, the BPO business fared badly due to project cancellations from a few clients and also due to the appreciation of rupee against the pound. MphasiS earns 43% of its revenues from the banking, financial services and insurance sector, with technology, manufacturing and retail, and telecom providing 25%, 13% and 9%, respectively.
Speaking to DNA Money, Ganesh Ayyar, chief executive officer, MphasiS Ltd, said, "The option of increasing Americans in our workforce is open to us in view of the recent announcements by US authorities. However, we will have to factor in many other things before that, like onsite cost versus margins. We also have to evaluate client willingness."
However, an analyst tracking the sector felt IT companies talking of recruiting more Americans and actually walking the talk were two different things. "Putting more people onsite will send their costs soaring. Moreover, clients might not be willing to pay that much," he said on the condition of anonymity. The analyst, however, added that MphasiS earns 94% of its revenues through time and material (T&M) contracts and so, is in the position to renegotiate contracts if onsite postings increase.
Of the 29,988 employees the company has, 1,721 work onsite, with the rest being offshore. As much as three-fourth of the company's revenues comes from offshore work, with onsite contributing the rest. MPhasiS' billing rate for onsite is about $71 per hour and for offshore, $17.
The US region contributed 67% to its revenues in the first quarter (November-January) of financial year 2008-09. MphasiS follows a November to October fiscal. In Q1, Europe, India and the Middle East and Asia Pacific accounted for 22%, 7% and 4% of revenues, respectively.
Its parent Hewlett-Packard, through its acquisition of US-based EDS Corporation, contributed 45% to MphasiS' revenues in the first quarter. "This is the first time we have taken into account business from Hewlett-Packard in our books after the acquisition. We will definitely look to increase its contribution further, because the EDS-Hewlett Packard combine too has grown five times in revenues. So, the relationship holds huge potential for us," said Ayyar. MphasiS gets outsourcing and infrastructure solutions projects from Hewlett-Packard.
Meanwhile, in these times of price negotiations from clients, the company may look at increasing the work hours of employees for cost benefits. However, Ayyar said, "Nothing of that sort is in practice at the moment." MphasiS added 9 new clients in its first quarter, including six through the Hewlett-Packard relationship. The company's revenues stood at Rs 9,77.7 crore in the first quarter of FY09, compared with Rs 8,94.72 crore in the quarter before that.
However, the BPO business fared badly due to project cancellations from a few clients and also due to the appreciation of rupee against the pound. MphasiS earns 43% of its revenues from the banking, financial services and insurance sector, with technology, manufacturing and retail, and telecom providing 25%, 13% and 9%, respectively.
Obama: Against Outsourcing
Continuing to play the anti-outsourcing card, Democrat presidential front-runner Barack Obama on Wednesday said while America cannot "shy away" from globalisation, it would have to take measures to ensure that jobs are not shipped overseas.
"We have to stop providing tax breaks for companies that are shipping jobs overseas and give those tax breaks to companies that are investing here in the United States of America," Obama said in during a debate with rival Senator Hillary Clinton in Cleaveland, Ohio.
The Illinois Senator, playing to the gallery of those workers who have been displaced in manufacturing jobs as a result of the North American Free Trade Agreement (NAFTA) and generally to the anti-outsourcing crowd, said he would ensure that every pact the US signs has environmental, safety and labour standards to protect workers and consumers alike.
"We can't have toys with lead paint in them that our children are playing with. We can't have medicines that are actually making people more sick instead of better because they're produced overseas," Obama said.
At the same time, he said, Americans cannot "shy away" from globalisation. "We can't draw a moat around us."
"The problem is we've been negotiating just looking at corporate profits and what's good for multinationals," the African-American Senator said adding, "as President, what I want to be is an advocate on behalf of workers".
Facing the heat from US presidential hopefuls who blamed "shipping jobs" to China and India for rising US unemployment, the India Inc had last week launched a counter offensive through the media, telling Americans that the industry is creating new work opportunities for them
Barrack Obama: on outsourcing
Barrack Obama: on outsourcing
President Barrack Obama's views on 'outsourcing', articulated in the run up to the US presidential elections, is a real cause for concern for the $60-billion Indian IT and ITES industry, which has grown rapidly on US orders, in the last over a decade. Obama had spelt out his views against outsourcing and is opposed to companies shipping jobs overseas.
However, one hopes pragmatism will replace the rhetoric, now that he is the US President and that he will see the mutually beneficial, 'win-win' strategic advantages of outsourcing. A closer look at outsourcing will, in fact, reveal that the game now is not just irreversible, but any adverse action against it will be mutually harmful. First of all, outsourcing in IT and ITES industries is no different from the larger trend of outsourced 'contract manufacturing' in the manufacturing sector and hence it should not be looked at with disdain.
In the past, US lost jobs in textiles and garments, shoe and toy making, and in other low-stuff industries, first to Japan, then to South Korea and later to China and other low-cost countries. Even in computer hardware, Intel ceded the low-cost advantage in chip making to companies in South Korea and Taiwan. Dell and IBM did the same in desktop computers and laptops.
Today, the ground reality is that US no longer has the capability and infrastructure to manufacture such low-cost products. The trend is the same in the IT and ITES sector and it is not an exaggeration to say that US has no (ready built) infrastructure left to enter and compete in low-end IT products and services. Indian IT industry may have grown exponentially, but mostly the work 'outsourced' is what some people call as 'coolies' jobs.
It is only recently that Indian giants, such as TCS, Infosys and Wipro are offering some competition to US biggies IBM and HP in the services contracts. But, volumes and values fetched so far are negligible. Secondly, US companies have hugely benefited by outsourcing in general and in R&D activities in particular. Some higher-end jobs outsourced to India have created high value products at low costs and the US companies have been able to sell those products globally, including in India and obtain higher returns. In fact, money spent in India in such activities may ultimately be recovered from sale of such products here.
Thirdly, Indian IT companies have themselves been huge consumers of hardware products from the US companies. Generally, US-based IBM, HP and Sun Microsystems have been in the race to sell hardware in India. Networking companies like Cisco have also been selling hardware for the fixed phones, the wireless and for the internet.
Thus while Indian software coders write codes for US companies, US companies find readymade market for 'Made in US' hardware stuff. Fourthly, Indian IT and ITES companies are also huge consumers of 'Made in US' software. Not only the hardware giants, such as IBM, HP, Sun and Cisco sell their software services, others like Microsoft now have a huge market share in all types of industrial and consumer software.
Fifthly, the outsourcing has created indirect markets for US companies, as the overall computer literacy has risen by larger penetration of computers and computers softwares. For example, by adopting e-governance, the government sector has created a huge market for hardware and software.
Markets have expanded for products related to security, data-warehousing, etc. Thus benefits to the US companies by way of local demand for computer products in India may far exceed the presumed direct loss of a few thousand jobs in US. Sixthly, it should not be presumed that if the US companies were forced to do their work locally under some legal or other compulsion, the software coders' jobs would go to US citizens only. Sooner or later, companies will find a way out to work circumvent those compulsions.In nutshell, bad times call for adopting flexible and innovative strategies and serving the customers in a better manner, so that when the markets recover, Indian IT companies develop better competencies, products, services and the skill-sets necessary to serve the future markets.
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