The recent layoffs in the IT, BPO, banking and airlines industry has presented a new challenge for corporate India. The layoff and subsequent reinstatement of the 1900 Jet Airways employees, as well as announcements by Kingfisher Airlines indicating additional layoffs have only aggravated the anxiety. All this, while the tremors of the investment banking meltdown, are yet to be felt by the students at Indian Institute of Management (IIM) Ahmedabad, Bangalore and Calcutta who are unsure of their job offers with Lehman Brothers or other investment banks which have made pre placement offers.
Students at IIM Calcutta, who have been presented with pre placement offers for the next summer, are awaiting the final word from Lehman Brothers. The bank has, in an informal manner, conveyed to these students that the acquiring company will absorb them. However, for those waiting to join Lehman New York, their employer would now be Barclays, and for those looking at a career with Lehman London it would be Nomura. According to the placement cell, IIM Calcutta students who had joined Lehman London this summer have not yet been laid off. Summer internships for 2009 have already started at the IIMs. This is known to be the preferred mechanism for banks hiring from the IIMs. Goldman Sachs, Deutsche Bank, Merrill Lynch, Barclay?s and Macquarie Group have already made presentations on campus, but Rahul Ajmani, of IIM Calcutta?s placement cell, says that the banks are keeping the number of their prospective employees secret.
IIM Bangalore presents a similar story, Here too, no organisation has given a clear signal on their offers, be it Lehman Tokyo, Hong Kong or London. Investment banks queuing up at IIM Bangalore for next year?s summer internships include Goldman Sach?s, Morgan Stanley, Barclay?s, Deutsche Bank and Merrill Lynch, with JP Morgan set to follow.
HR analysts say the manner in which the layoffs were conducted at Jet Airways was unfortunate and unplanned. The new HR head has been with the airlines for the past 10 months. In the recent past, other IT and banking companies, which have weeded out similar numbers of people, have done it in a more strategic and objective manner and over a period of a few months. Adds Tanmay Kapoor, partner, Advisory Services, Ernst and Young, ?Over the last three years the job situation has definitely been skewed in favor of employees. It is only in the last few months that we have seen some balance.?
?One of the effects of the current downturn and spate of layoffs is that attrition across sectors has gone down by at least 3% points. Salary levels and increases have taken a beating and have dropped from as recently as three months ago?, says Sandeep Chaudhary, business keader, Hewitt Associates? Rewards Consulting practice.
The overall impact of the financial services meltdown will continue to affect jobs and salaries over the next 6 to 12 months. The only difference between layoffs in India and in the US is that if a certain position is made redundant in the US, the employee is usually made to leave irrespective of his or her performance, whereas in India companies will usually try and retain top performers in other roles even if their positions are made redundant.