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BUSINESS: SOFTWARE SLOWDOWN
The Job Squeeze
The layoffs in the US and threat of a fall in business
of Indian IT companies has for the first time created panic among software
professionals
By Malini Goyal
We are being treated
like prostitutes with aids and asked to go back to our village,"
says Vikas Sundar. "I got laid off two months back. Now I am packing
my bags to return for good. They treated us like kings when they needed
us and like untouchables when they don't. The company that laid me off
just deactivated my entry card to the office. A week later, I got a letter
saying you are no longer needed."
"It's terrible! I had four months left
on my six years of H1 and I was laid off," adds Sanjay Kawatra. "My
green-card processing has gone back to zero. I've been offered a job as
of yesterday but I have to apply for a fresh H1 since I've been off the
payroll for about 35 days and transfer is not allowed. Looks like I'll
have to leave the US for 12 months because it doesn't look like I can
extend my H1 beyond the six years."
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"With
experienced brains returning from the US, freshers will be affected."
K.Lakshmikanth, CEO,
PrizedJobs.com
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These are just some samples of messages posted
on a website by Indian software professionals working in the US. The ripple
effect of the layoffs is being felt on Indian shores too. Take the case
of Rajesh Keswani. The 26-year-old software engineer was happy with his
job in Wipro till a few months ago. The salary was good and job offers
galore. And though there were clear signs of a downturn in the US economy,
the lure of working in Silicon Valley was too strong. So, struck by the
Great American Dream, Keswani took up an offer to work in the US and quit
Wipro. But even after four months of making the offer, the US company
has yet not asked him to join. Keswani now works for a start-up in Chennai.
The dream has turned into a nightmare.
The slowdown in the software industry triggered
by a sluggish US economy has created a fear psychosis among IT professionals
in India. By July, an estimated 50,000 laid-off Indians are expected to
return home from the US, giving rise to fears of glut of job seekers in
India. "Psychologically the slowdown has affected everybody,"
says Ravi Nair, director, Sun Soft Solutions, a placement company specialising
in it.
Job hopping, an everyday feature in the industry
till a few months ago, has reduced drastically. The employee turnover
of some infotech companies is already showing a declining trend. For the
quarter ending December 2000, an average of 16.8 per cent of the Hyderabad-based
Satyam's employees had quit the company. This average had come down to
12.7 per cent for the quarter ending March 2001. Similarly, at VisualSoft,
another Hyderabad-based company, the employee turnover has fallen from
5 per cent to less than 3 per cent. Says Vineet Nayar, executive vice-president,
HCL Technologies: "This recession will solve a number of hr-problems
of the IT industry."
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"Overseas
Indians come back for retraining as India is a cheaper option."
K.C. John, Managing Director, JobsDBIndia.com
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To be sure, job cut is not half as severe in
India as it is the US. Though most infotech companies are saddled with
temporarily benched employees and some have even resorted to outright
layoffs (most deny on the record), the overall demand for software professionals
hasn't fallen. Even those who have lost their jobs in the ongoing uncertainty
and slowdown have more than one job offers to pick from. Says Akhilesh
Kumar who was recently sacked by a Gurgaon-based software company: "I
have more than one job offers, but I am shocked that I was sacked and
the manner in which I was asked to quit."
If panic, anger and shock is disproportionate
to the extent of slowdown, it is because this is the Indian software industry's
first ever experience with a downturn. This is an industry which has grown
at a jaw dropping rate in the 1990s-from $100 million in 1990 to $6.2
billion in 2000-01 and is projected to touch $50 billion by 2008. Such
growth has obviously generated heady notions of perpetually skyrocketing
salaries and flood of job offers. What the current slowdown has done is
to correct those heady notions. VisualSoft Chairman D.V.S. Raju admits
that annual wage hikes of 40-50 per cent have come down to more realistic
levels of 15-20 per cent.
In fact placement companies feel that the return
of US-based Indians will bring in the much needed middle-level managerial
expertise that the country was lacking. Earlier, experienced professionals
flew out of the country for better opportunities and Indian companies
had no options but to make do with whatever was available. "With
experienced brains in the market, it's the freshers who will get affected
the most," says K. Lakshmikanth, CEO, Prizedjobs.com.
But that may not mean that all out-of-job returnees
will be absorbed. With technology moving at a bristling pace, the skill-set
requirement is ever changing. Retooling and retraining is now a necessity,
no longer an option. Says K.C. John, managing director of headhunting
firm JobsDB.com: "A number of overseas Indians are coming back to
retool themselves as India is a cheaper option. Most of them want to come,
retool and go back."
As Wipro Chairman Azim Premji argues, even with
the global slowdown the Indian software industry projected to grow by
at least 40 per cent this year. That kind of growth will certainly generate
more jobs-not less.
—With Amarnath K. Menon
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