IT looks at 2% job losses; less staff addition this year

Written by Rachana Khanzode | Mumbai | Updated: May 5 2009, 06:21am hrs
With the economic situation impacting the Indian IT industry severely and job losses expected to mount between 50,000 to 75,000 this year, net staff additions in the sector are expected to be less, say industry experts.

Nasscom, the premier trade body and the chamber of commerce of the IT-BPO industry, said this year the number of direct jobs is likely to touch 2.23 million. However, with the increasing number of layoffs in the industry, the demand for engineers is decreasing gradually.

Nasscom president Som Mittal said: We expect companies to grow single digit this year and the net employee additions will be small. We also expect almost 2% job losses in the sector. The major concern at the moment is that other sectors like manufacturing, retail and finance too are not recruiting.

IT companies are already experiencing low net additions. However, this year it is expected to be a conscious effort. Tata Consultancy Services had a net addition of 18,452 people in the financial year (FY) 2009 as compared with 22,116 in the last fiscal. On the other hand, Infosys added 13,663 people during FY09 as against 18,946 in FY08. Wipro, across its IT services, products & BPO divisions, added the lowest net numbers among the three companies - just 2,243 people in FY09 as compared with 18,227 in the previous fiscal.

Industry experts say this situation has cropped up with diminishing budgets of the clients. This has forced the companies to do away with employees on the bench. Last year, most of the major IT companies delayed hiring plans for about a year on account of delayed projects. This is also impacting the way companies are hiring at the moment.

Most of the companies have frozen their recruitment procedure for the moment in a bid to honour earlier commitments, while others who are still hiring have made the process very stringent, said Keshav Murugesh, CEO, Syntel Inc Clients have become focused now and are not ready to accept anything from India. Therefore, whatever job opportunities are there, they will be taken up by focused candidates.

Ajoy Mukherjee, vice president & head (global HR), TCS, had told FE, Of the 24,885 campus offers, we are expecting a joining ratio of 75%. He added that the company had frozen its lateral appointment for the time being and have not indulged into any direct recruitment in the fourth quarter. While recently, Girish Paranjpe, joint CEO of Wipro's IT business, said: We want to keep our bench tight so that everyone can be engaged. Ananda Mukerji, MD & CEO of Firstsource, said in earnings call that the company would continue with its 'just-in-time' hiring.