The Satyam fiasco could have far reaching impact on the Indian IT industry, which could be found staring at an oversupply of job seekers. It is being speculated that in the event of no-cash on the company?s balance sheet, it might have to layoff some employees from its workforce. Hiring consultancy firms put the number of layoffs between 10,000?15,000 employees and largely from the lower rung of the hierarchy.
After the startling revelations of fraud, if some key clients of the company decide to pull out or poached by rivals, the teams working on those projects may find themselves jobless. Market experts also feel if the company undergoes a merger, it is quite likely that some employees will be laid off by the new entity to avoid duplication and flab. Whatever the case maybe, the Satyam episode will add to the woes of the IT job market, which is looking at a tough year ahead with not many vacancies.
?Of the total 53,000 employees, 15-25% of the Satyam staff at the middle or the top level may manage to secure good jobs, the rest are a concern area,? said Gaurav Sahu, partner, Grant Thornton India. He added despite the concerns, everyone is hoping the government will step in and bail out the company. Ever since the confession letter came from its former chairman B Ramalinga Raju, job portals and hiring consultancies have been flooded with resumes of Satyamites.
As the Indian IT industry prepares for lesser projects, it is trying to increase the utilisation rates, cut excesses and lessen the staff on the bench as much as possible. This could make the going tough for former Satyam employees as well as other potential job-seekers. However, Gaurav Gupta, country head, Everest group, an IT consultacy said other providers will benefit from high quality talent.
?The industry is still expected to grow at 15-20%, which leaves a lot of space for talented people,? he said. In fact, Nasscom has trimmed the hiring target for this year from the earlier 2,75,000 to around 2,00,000 by the IT/ITeS industry. Moreover, Unites India, a union of ITeS professionals, has warned that over 50,000 IT professionals in India may lose their jobs over the next six months. ?The economic meltdown has addressed the issue of talent shortage, oversupply is a concern now,? Ganesh Natarajan, chairman, Nasscom said on a lighter note.
The industry body has also asked its recruitment team not to poach anyone from Satyam. Earlier, Infosys had made a statement to refrain from hiring employees of Satyam Computer Services. ?Right now, everybody is waiting for the actual picture to emerge. The situation will depend on whether clients stay with the company and on what margins is it operating,? said Hitesh Oberoi, COO, Info Edge (Naukri.com).
The only silver lining that experts see in this crisis is rationalisation of salaries. ?Despite the downturn, there continues to be a mismatch between expectations and what companies are willing to offer. I think this crisis will address some of those issues in the industry as people will not be left with too many options,? said an analyst with an IT consultancy.
