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Follow UsBANGALORE, INDIA: Everyone has this one question on lips: What will be the impact of the US economic crisis on Indian IT companies and more importantly on jobs? BFSI is already seeing so many layoffs, will IT also follow suit? We take a look at the present Indian IT scenario and the hiring plans of Indian software companies for the immediate future. But more importantly we dwell on what job seekers should do to make the most of this scenario
Citigroup laying off 50,000 employees. PepsiCo retrenching its manpower by 14,000. Scary stuff! In this age of global slowdown, professionals across all industries suffer night pangs, fearing the proverbial pink slip on the morrow. Such fear is not new for IT professionals, as the 2001's dotcom bust is still fresh in memory. Even during this recession, most surveys suggest that there won't be too many job positions opening up in the coming year. So, while the US has already caught a severe cold, how can Indian IT companies not even sneeze!
Should you panic?
NASSCOM subscribes to the theory of job cuts, however, and surprisingly indeed, the Big 4 of the Indian IT industry have gone on record to announce their hiring plans for 2009. Infosys has announced that it will be sticking to its original plan of hiring 25,000 new people for the coming fiscal. TCS has already made around 25,000 technical campuses offers for the year 2009-10, which interestingly is 13 percent more than this year.
Satyam too will be hiring 8000 to 10,000 people for the coming fiscal. Wipro has made offers to about 10,000 fresh-graduates and plans to do a 6000 lateral hiring of people. Campus hiring from premier institutes is already over with most students securing decent job offers. All this sounds rosy for IT professionals as far as job openings are concerned. However, there's still cause for concern. NASSCOM has predicted that there is likely to be a significant impact of the global crisis on the Indian BPOs.
India might see a reduction in software exports and outsourcing projects. But, despite the general economic slowdown, India's IT and ITeS industry would continue to log in 21-24 per cent growth this year, and would remain competitive in the global market. Software Cos and BPOs would continue to grow, though not at the pace they have been used to during the last few years.
| The slowdown will pass on in a year's time. This coming year could be a major opportunity for many IT companies to acquire new clients.
How much has the global economic slowdown impacted the Indian IT industry?
What would be your advice to IT professionals during this slowdown and how can they safeguard their jobs? |
There is no need to press the panic button and get frightened by the thought of being laid off. This surely is a passing phase and one where you could still look at a lot of other opportunities in the IT industry. However, the honeymoon period, where IT professionals, mainly at entry-level were being hired for an anticipated project, and that too at good packages, might not happen as frequently, as companies avoid to keep employees on bench. Also employers would seek employees with a complete skill set knowledge and those who would be willing to work on any vertical. So, brace yourself to be flexible to adjust to any IT domain and also keep updating yourself on the newer domains coming up.
| We have decided to step back a bit and wait for the decisions of our customers before further recruitment.
Given the scenario of a slowdown, what will be your advice to the freshers in IT domain?
Are you planning any fresh recruitment in coming months? |
Slowdown and the Indian IT Industry
The economic slowdown seems to have both positive and negative impact. The effect of the economic crisis in the US and the resulting economic growth concerns is spreading across the world including India. The growth in India is expected to come down to 7-8 percent from the earlier 8-10 percent. But despite the current economic scenario, companies will continue to invest in IT. There could be some short-term impact as corporates clamp down on costs to wade through the present economic crisis. However, in the medium to long term, corporates would continue to invest in IT as it would bring more efficiency, better customer service etc. As a result, the technology spending in the medium and long term will also continue to increase.
According to NASSCOM, the Indian IT industry would grow at 22 percent this year compared to 29 percent last year. Also only 2,00,000 jobs were created this year against the expected 2,70,000 jobs due to the slowdown. This reduction in job creation is the negative effect of the slowdown as the IT firms dependent on BFSI segment for business will see slow business growth.
Apart from banking, the other two major sectors, manufacturing and retail, will also be affected from the slowdown and as a result to sustain costs, companies in these sectors will also be curtailing their IT spending. Also as the US or the European companies will be curtailing their expenditure, Indian IT companies would not be in a position to send their employees on site to such countries for handling projects. Thus, it is not just the domestic job scenario that will be impacted, but even overseas job placements shall be hit.
| The 2008 slowdown will result in more outsourcing, just as what 2001 recession resulted in. We believe that the IT industry will bounce back, there will be no dearth of job opportunities for the students or professionals. All they need to work on is honing their skills sets-to be competent to face the challenges in the IT sector. In the coming time, all Indian IT firms (including Infosys) would require professionals with specialized skills so as to meet their targets. We promised to hire 25,000 people in this FY 09 and we are well on our way to achieve this.
Infosys spokesperson |
Advice: Score over others
Remember, 'survival of the fittest;' this is the time to work around this phrase. The retrenchment policies of companies work around this as well. This is the time when companies look for one good performer who can replace three average performers. And even though the IT industry won't be seeing too many job cuts, you could always keep yourself competitive and have that extra edge when company starts identifying people to be laid off. This is the right time to think about enhancing your knowledge. Professionals can opt for obtaining certifications pertaining to their domain. Also obtaining the functional knowledge of the business area to which you cater will only prove beneficial to your career growth. If you have been on bench for a while due to scarcity of projects coming in, then utilizing this opportunity to learn a new technology through some professional institute or self learning can help you to widen your career prospects. Certifications add credibility to an individual's inherent knowledge about the subject. They also provide your resume that extra edge over others during the short listing phase for selection.
Despite the economic slowdown, the telecom indutsry continues to grow at an outstanding pace. The slowdown is a temporary phase which would be overcome very soon. An individual with a key competence will always have an edge over others. For instnace, going by the recent growth of the telecom companies which are moving towards services like infrastructure management, application services etc. people with relevant skill sets will be required at various levels. Business models such as SAAS require an experience in both telecom and IT. |
Once the economy starts stabilizing, these newly learned technologies or certifications will prove to be advantageous. Also it will ensure that even if due to this slowdown, if a sector faces downturn, you will be able to enter a new sector because of your skills.
Opportunity areas
Fact one: Indian IT industry has been one of the badly hit sectors due to the US economic recession. Fact two: It's the Banking and Financial sectors of the industry that have been primarily responsible for a loss of business for IT firms in India. Fact three: Indian economy will still grow at rate of 7 - 7.5 percent and there are sectors that will fuel this growth. Infrastructure, pharmaceuticals, health care, power and telecom will be the few sectors that will be least affected from the slowdown and will still witness growth.
The IT industry will gain business from these sectors; also these sectors will require IT services for their management needs. Similarly, public sector units and railways have huge demand for IT professionals and they shall continue to give a lot of business to the Indian IT firms. So, IT professionals will see reduction in jobs from BFSI segment but there won't be dearth of opportunity as there will be opportunities coming from other sectors of the industry.
For example, many BPOs and Banks employ networking and database professionals. These professionals could also look at career growth in telecom. Ditto for software professionals, as coding being the core of any project, shall always be in demand. But, software professionals who had their expertise in banking or finance, will find it difficult to change jobs. Also with their functional knowledge, it is not advisable to change their focus. Because once the economy sets pace again, it will again be the BFSI sector that will boom.
During this time of economic recession, IT professionals can seek careers in domains like storage. Likewise, networking professionals will always be in demand in telecom and security sectors. But yes, I personally think that IT professionals in financial domain will face a difficult time ahead. My advice to freshers would be to look at core sectors like infrastructure and manufacturing other than the banking sector. |
Domain specific opportunities
There will still be opportunities in various sectors for IT professionals despite the slowdown, but what's the skill set that professionals should focus at? Let's take a look at various domains and opportunities there.
Open source: Organizations will look towards open source solutions to run their business at reduced costs. Therefore professionals in this domain will see increased demand. From operating systems such as Linux or the development platform Java, such professionals will be sought after as organizations take to adopting open source technologies to save operational costs.
| We don't see any specific vertical within IT where there will be maximum job cuts. In the worst case scenario of likely job cuts, the professionals who would get impacted would be those who haven't lived up to the performance benchmarks set by organizations irrespective of their domain / skills. Freshers need not to change their career track under the fear of economic slowdown, they should rather work on their strengths and interests. It is going to be patience, resilience and a greater degree of flexibility to mould themselves according to the chang
SV Krishnan, Global Head HR, Satyam Computer Services |
Embedded Technology: There has been a lot of embedded technology being used in the mobile and electronic devices segment such as DVD players, set-top boxes, etc. As the electronics industry as well as the mobile industry is witnessing huge demand, there will be vast scope of opportunities for embedded programmers to program the chip as well as in the area of creating mobile operating environment.
Software development: The major contribution of revenue for IT industry comes from software exports and outsourced services. Due to recession, lesser business will come India's way, so developers and testers will witness reduced opportunities in sectors like banking and finance, but they will always remain in demand for any project as they form the core of the development cycle.
Networking: Networking professionals have wide scope and reach in almost every sector of the industry, as they are needed from infrastructure setup to the security of the information network. Telecom, media and broadcasting industry, SaaS providers will be the segments where networking professionals can venture if the BFSI segment doesn't provide them with much growth prospects.
Storage: Data explosion is taking place across all enterprises, and as data is crucial for any enterprise, they shall be investing into data management and security even more. Even networking professionals with certifications from SNIA or EMC shall find huge prospects in this domain.
Enterprise applications: Enterprise business apps are the core of any organization's business. Due to the slowdown, many enterprises will not plan new implementations, but it will be a necessity for them to maintain their present Enterprise Apps. The Enterprise Apps professionals will not find the same level of demand as was the case earlier, but they will still have opportunities coming from new sectors, that have till now remained insulated from slowdown. Also consultants will witness new opportunities, as to cut costs enterprises will be handing over their key operations to consultants so that enterprises will not have to bear the overheads of keeping manpower to maintain such operations.
Final words
Economic slow down is a cyclical process, so there's nothing to worry about. Consider it as an opportunity to hone your skills and become more indispensable to your organization. Once it's over, you'll emerge stronger than ever before!