Tuesday, 27 June 2017 08:50

India's IT sector sees 60,000 lose jobs: report

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About 60,000 workers in India's IT sector have lost their jobs in the last few months, according to the Forum for IT Employees, a professional grouping of workers from about 50 IT companies in the country.

A.J. Vinod, a representative of the organisation from Chennai, told the Washington Post: “Employees are being rated as poor performers so companies can get rid of them."

Only one representative of an Indian outsourcing company, TechMahindra's vice-chairman Vineet Nayyar, has come out openly and blamed the policies adopted by the new US government for the drop in Indian hirings in the US.

The Post report did not apportion any reason for the spate of sackings, but an Indian newspaper reported last month that many local IT outfits were reducing staff numbers.

The major outsourcing companies have all announced job cuts as earnings fall, according to The Times of India. It said Cognizant was expected to cut about 6000 jobs, Infosys was set to sack about 1000, while Wipro had said that if earnings did not grow, then 10% of the workforce would be laid off, and French company Capgemini had also announced cuts in India.

The paper said that things were not looking rosy for many IT companies in Bangalore, the main city where outsourcers are based. China's LeEco had fired 85% of its staff in India, mobile services firm Aircel sent 700 employees packing, online retailer Snapdeal announced unspecified cuts, fashion retailer YepMe cut staff, ethnic fashion site Craftsvilla laid off hundreds, payment gateway PayU cut 110 staff, industrial marketplace Tolexo laid off 50 employees, and Internet company Girnar Software shed 100 jobs

Though the companies and government officials are trying to play down the situation, the Post said that industry experts were not so sanguine.

"For the first time, companies are touching middle management,” said Kris Lakshmikanth, chief of a recruitment firm called Head Hunters India, was quoted as saying.

“Usually in IT, people grow with the industry. Every two or three years, salaries increase, and everyone gets promotions. That’s the norm. In more than 20 years, I have not seen managers being sacked. Now it is happening everywhere – Pune, Bangalore, Hyderabad.”

The lack of work in the US, one of Indian IT's main markets, has been accentuated by the call from US President Donald Trump for an America-first approach. At least two companies that are big outsourcing players, Infosys and Cognizant, have started recruiting Americans instead.

Since the mid-1990s, the number of IT workers in India has risen to nearly four million, and accounted for about 9.5% of the country's GDP.

According to the India Brand Equity Foundation about 67% of the world's outsourced IT work is done either in India or by Indians who go to various countries and work there.

Indian outsourcing companies account for a majority of the H1-B visas issued in the US each year, but this year applications overall have fallen for the first time in four years. This follows changes in the criteria for granting these visas.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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