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Job cuts, salary squeeze in infotech sector

Anjan Mitra, Surajeet Das Gupta, Sanjay K Pillai & K Giriprakash

The slowdown in the US economy has begun taking the sheen off infotech jobs. Companies are cutting down placements, and the jobs on offer now come with slimmer salaries and, in some cases, no perks.

Some of the top headhunting firms of the country are experiencing a 30 per cent drop in demand for placements from the infotech sector. The demand from multinational firms has dropped by almost 60 per cent. The squeeze is tighter at the lower end of the job spectrum, where demand has gone down by about 50 per cent, as against 15-20 per cent at the higher levels.

"The overall demand (for placements from the infotech sector) has gone down by at least 30 per cent compared to last year," Gopal Krishna, practice leader, Hewitt Associates, said.

The country's leading search agency on the Net, Naukri.com, expects a fall in the number of IT jobs in the market if the US downturn continues. Sanjeev Bikchandani, CEO of the portal, said: "A lot of IT companies are interviewing people and selecting candidates, but are not giving them the final letter of appointment."

If that were not bad enough, some leading IT companies, including those based in Bangalore, have asked new recruits to join at a much lower salary, about Rs 10,000 per month, compared to the promised package of about Rs 16,000 per month. Employees are being told that there are no more perks round the corner while the existing ones are being scaled down.

A leading Indian company with interests in hardware as well as software, it is learnt, may not offer new employees any perks and has negotiated lower salaries for new recruits.

In a leading unlisted Indian e-CRM (customer relationship management) product company with a services division, members of a team working on a project with Microsoft resigned after the project was shelved and the company asked its employees to relocate to India.

Yet another leading Indian software company, whose employee stock options were the best of the breed in India, did not recruit from the IIMs this year ostensibly because it did not get the slot it asked for, and has asked lateral recruits to join three months later.

The extent of the slowdown in recruitment is highlighted by a survey of employment trends in the job market carried out by CareerMosaicIndia.com between August 2000 and January 2001.

The survey found that five of the 48 sectors it covered offered 60 per cent of the total employment.. The break-up: IT/Communications 30 per cent; software development 13.8 per cent; engineering seven per cent; academics five per cent and ERP/Business solutions 3.5 per cent.

Pointing out that IT and IT-enabled services companies were in a spot, Vimmy Makar, promoter of Careerist Management Consultant Pvt Ltd, said, "For the last few months, on average, we have been getting 8-10 resumes daily from the US for a job in India." And Careerist has not been able to find jobs for everybody because, according to Makar, demand for recruits from international infotech companies has gone down by about 60 per cent.

"Companies whose names you did not hear a couple of years ago (in the infotech sector) are the ones going down under and slashing jobs madly," said an IT sector specialist with a Bangalore-based headhunting firm.

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