Tuesday, February 5, 2008

Rupee appreciation What does it say for Indian IT jobs.

Rupee appreciation What does it say for Indian IT jobs.

From 2003 to 2007 the Rs appreciated from 48 to 43.....Hmmm 4 years for such a margin was ok. But this time the rupee in a few months downsized to 39 and is stable there for a long time. From my perspective big IT companies with huge margins will sustain this appreciation. Its possible that job cut off's can be part of sustainance. For smaller and medium companies it
can be wash out also. The margins on which they operate are small with rupee appreciating it can worsen further.

I ( and i hope many seniors in IT industry know about those phases ) had witnessed two such falls one in y2k and the other during dot com. The question in this down turn will be not about jobs but about expectation. Today an indian IT professional has been habituated and pampered to 20 to 40 percent rise with bonus. Will he accept 10 to 15 percent rise with bonus cuts ?.

So this year for IT will be all about consolidation.One thing very much possible is that this appreciation can be oppurtunities for countries like Philipiness because of
reasonable man power.

So what does it mean for small people like us who work in the IT industry :-
  • If possible think about joining good Non-IT firms. I have already done that.
  • Do not be on bench.
  • Keep yourself prepared mentally for variable bonus cuts.
  • If you are working for IT companies be mentally prepared for cuts and low salary rises. Where an IT professional was getting 30 to 40 percent rise , expect only 10 to 15 percent. Remember life is not about always green but also about struggle.
  • If you are in training industry try to get away from it they are hit the most. When cost cutting comes trainings are the most affected.
  • Be a part of project which has good financial returns. Not a simple part but a important part of the project. Company should value your existence in the project.
  • Do not shy away in cross questioning your end customer onsite are they thinking of cut off.
    If you are fresher looking for job try Non-IT firms for this year. Who knows what will be in store ?.
  • If you have taken loan on the current hefty pay try to talk to your seniors to understand what is the companies move for this global recession and slow down. Will it affect the company profits in any way ?.
  • If you are senior who is aware of the cut please give signals to the people below regarding the same.
  • Every rise falls and every fall rises some times or later rises. So this is a temproray phase it will come and go.
  • If you beleive in yourself you do not need to take any thing of the above seriously.

8 comments:

From DM said...

In my organization i can feel the heat....Wondering how deep this can go

RakeshJi said...

I am not still getting any messages from company or seniors but i am sure there is something happening around...Any organization in India facing layoffs just let me know.

Kalinga said...

Dear Shiv,
You are a know icon in an Industry you should not write such kind of articles in your blog. Its really discourages people for no reason. Know the reality indian IT future is strong.....Please every one do not get panic this article looks more of whispers and not fundamental....Sory shiv for any harsh words

Sushil said...

Today i read about TCS removing 500 people....This article is real.

Ragan said...

I think the companies who are doing losses will take this as execuse to remove people. I am sure there are many IT companies who where doing losses in green time also , so this period can be taken as a excuse.

Anonymous said...

Recession is here......




TCS: 500 resign on poor performance







BANGALORE: Tata Consultancy Services Ltd, India's largest software services exporter, said on Tuesday that about 500 of its staff had resigned after their performance was rated poorly.







"Those who cannot meet the performance requirements of our company are asked to look for another job commensurate with their abilities," a spokesman for Mumbai-headquartered Tata Consultancy told Reuters. "This (financial) year so far about 500 people have resigned voluntarily."







The company's financial year runs from April to March. "It's not an exceptional thing, it happens every year and it's part of our annual performance exercise. Last year also similar number of people left the company," the spokesman said. In the December quarter, Tata Consultancy, part of the Tata Group that has interests in cars, commodities and services, added 4,037 net staff taking its total headcount to 108,229, up from 83,500 a year ago.







India's export-driven software services companies have been winning large outsourcing contracts from western clients, but recession fears in the United States, a strong rupee, soaring wages and a skills shortage are major worries.







There are no free lunches in this world.











IBM dismisses 700 freshers in India











KOLKATA: This may literally be a bolt from Big Blue! IBM is learnt to have delivered the pink slip to a sizeable chunk of its entry-level trainee programmers (ELTPs) across major offices in India.







Most of these ELTPs, who were engineering graduates, had put in nearly a year and were working in numerous technology practice groups under IBM India’s global delivery business.







Though IBM is silent on the actual number of ELTPs dismissed, the total is likely to be in excess of 700 across company locations nationally, including 180-odd in Kolkata alone.







ELTPs, who were essentially freshers, were asked to go based on their performance in aptitude tests that were recently conducted in undisclosed IBM India locations. It is learnt that action on the ELTP front in major IBM locations was an ultra hush-hush exercise about which many senior IBM managers were in the dark.







At present, the IBM India management is reluctant to go into the details of its latest HR exercise. But in a written response to ET’s email query, an IBM spokesperson said, “IBM is driven by a high-performance culture, a place where employees are able to contribute at the upper limits of their potential and continually build market-valued skills and capabilities in both formal training and experiential learning. In support of that expectation on the part of our workforce, we are pioneering new ways for our people to certify their skill levels as both a validation of their value to clients and to reinforce the quality of our employees’ personal skill sets.”







IBM has strongly refuted any possible link in the latest action on the ELTP front, with industry speculation about IBM’s global services business suffering a cash loss in India in 2007.



“Last quarter marked IBM’s strongest revenue and profit performance in almost a decade, with a revenue of $28.9 billion and cash of $16.1 billion globally. Key to this success was IBM’s services business performance and momentum in emerging markets, including India, which represents one-third the company’s global revenue,” the spokesperson said.







“India is at the heart of IBM’s services strategy which has grown from a 53,000-employee organisation in 2006 to 73,000 in 2007. We continue to hire people with skills that meet our client needs and business demands,” the spokesperson added.







But IBM declined to respond to ET’s other query on whether the company needed to keep state governments in the loop ahead of kicking off the ELTP action.







The West Bengal government said it was clueless about the development. The state IT secretary Siddharth said, “I am not aware of these developments at IBM. But this is strictly a company decision, a matter between employer and employee. After all, when they hire people, they don’t inform us, so they are not obliged to tell us if they dismiss people. State governments usually get involved when a company decides to shut down operations.”







Under its present executive management grid, IBM India has six global delivery centres in Bangalore, Hyderabad, Chennai, Pune, Gurgaon and Kolkata. All location heads report to Rajesh Nambiar, vice-president (global delivery) for IBM India.











TCS Cuts Salaries







NEW DELHI: Country's largest software exporter TCS plans a 1.5 per cent cut in salaries of its over one lakh employees in the fourth quarter, as it fell short of certain financial targets.







Currently, the company offers a two tier pay package consisting 70 per cent fixed and 30 per cent variable pay. The variable has two components -- company and individual performance.







The company's Economic Value Added (EVA) for the third quarter was slightly short of target, which has forced it to cut down the salaries, TCS General Manager (Corporate Communications) Pradipta Bagchi said.







"The cut down is just a small adjustment as against the total compensation paid by the company before starting of the third quarter,” he said, adding that a combination of various factors including rupee appreciation led to shortfall in the target.







Rupee has appreciated about 14 per cent against the US dollar in the last one year.







TCS has about 1,08,229 employees and posted a 19 per cent net profit during the third quarter at Rs 1,327 crore. EVA is the difference between net profit and the cost of capital.







According to reports, the EVA-based variable payout for the company stood at Rs 293 crore for the quarter. The actual variable payout, made in advance, based on expected EVA amounts to Rs 376 crore.







The advance payment that has to be adjusted amounts to Rs 83 crore which will be recovered during Q4 from the employees.


At last what we can say is, leave every thing to fate and work only...

Jha said...

I have decided to open a shop ,IT is enough for now can not stand this instability any more.I work for IBM and have got pink slip i really do not know what to do. Taken a loan for my house , forget about the loan money i am thinking after 4 months how will i maintain the same status of life.....

Shiv i have your book and thats the only hope i have. Hope to get a job soon.

Anonymous said...

MNCs HAVE 10-15% PROFIT MARGIN,SEE YEARLY RESULTS OF HP AND IBM. INDIAN COMPANIES AND INDIAN BUSINESS ESTABLISHMENT WORK ON 30% PROFIT MARGIN. IF THEY MAKE SLIGHT ADJUSTMENT, ALL WILL BE FINE. THIS IS JUST A GOOD REASON FOR IT COMPANIES TO CUT SALARY AND LAYOFF SOME PPL.