Budget cuts in the wake of economic slowdown

BANGALORE, INDIA: The world is certainly flat. The effects of economic recession are being felt globally. What began as a wave of job losses andlay offs is now reaching tsunami proportions. Several top firms had begun strategic cost-cutting initiatives even before the announcement of a global recession.

Responding to the economic slowdown, most IT players have frozen hiring of new recruits and several companies are withdrawing offers that had been made to selected candidates. In addition, several cost trimming exercises are now underway at major corporate houses.

“International trips, be it short or long duration, have been clamped down,” said an employee at Yahoo, Inc, voicing a common observation of employees from different sectors.

Many employees hopeful of being sent abroad for onsite assignments have had to contend with holding their jobs as they adjust to increased threats to job security. Video conferencing is now replacing foreign business trips.

According to an employee at Philips, “We have also been notified of reduced or drastically cut budgets for organizing events and semi-annual outbounds.”

Many domestic software firms have taken budget cuts one step further.

Routine stationery is now being accounted for and employees have to fill out a form or use their ID cards to obtain peripherals such as paper and pens, said an employee at an Indian MNC. At other larger organizations, budget cuts have reached canteen doors.

“We used to get free snacks and beverages, but now the quantities seem to be smaller,” lamented one employee at a BPO.

The general sentiment among IT employees is the imminent scale back of annual incentives and pay raises. However, several companies have ensured that top performers will continue to receive appropriate pay raises.

This trend clearly indicates that IT firms are making an effort to retain top performers and talent and are cautious about mass layoffs and across-the-board budget cuts, which can be detrimental in the long term.

Organizations are veering towards leaner teams with solid performers, indicative of a systematic rational approach to facing the economic slowdown.