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Young techies worried as IT jobs bite

According the industry officials the increasing wage costs are the main reason for the job cuts, reports Venkatesh Ganesh.
By Venkatesh Ganesh | Hindustan Times, Mumbai
UPDATED ON FEB 08, 2008 09:34 PM IST

Nobody likes to lose a job or get a poor wage increase. And certainly not a youngster opting to work in an industry in which India is a superpower and salaries are a big pull. But the virtually impossible is happening this year, and its human cuts perhaps run deeper than the economic crunch.

Rohit Singh, (name changed), an engineer working for the Pune office of Tata Consultancy Services (TCS), the country’s biggest software exporter, is a worried man these days. His 23-year-old colleague who was working on a project for a US-based telecom client, has just been sacked for “non-performance.”

While the official line in the leader of the multi-billion-dollar IT industry is that 500 people are being “disengaged” on grounds of performance, the overarching background of a likely US recession and a strong rupee tell a different story.

Increasing wage costs, which account for 45 per cent of an IT company’s revenues, are the main reason for these job cuts, industry officials say. There could be more job cuts in the offing, add human resource consultants.

For about a decade now, IT majors like TCS, Wipro and Infosys have been merrily hiring fresh graduates to serve what often looks like bottomless demand. But training costs to make fresh graduates yield productive hours are rising.

According to industry watchers, freshers form in excess of 50 per cent of the total workforce. Often, they are kept on the “bench” as they wait for work to arrive, but staggering demand and rising wages mean brakes on that luxury for IT companies. Young techies like Singh are anxious, because freshers are not treated with a kid glove anymore. “We are concerned about our jobs and the talk inside the company is that the salary hikes will be much lesser as compared to last year,” says an employee at TCS in Pune.

TCS has an employee strength of 1,08,000 and 500 workers getting the sack may not be a big deal, but it is not the only company that seems to be in a cutback mode – if rumours are to be believed.

Multinational IBM’s chief executive Sam Palmisano went out of his way to assure employees that there would be no job cuts, but the company that has tens of thousands of techies working in India did not respond to queries on the issue from Hindustan Times.

Industry experts say quality of work is critical as Indian IT companies move from hourly billing to service-based fees.

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