CNN-IBN reports,
The IT industry has some job worries. More than 500 IBM and TCS employees across the country have been retrenched. This has techies in the IT industry uncertain about their future.
Now, I am not some economic expert (just a naive Indian!), but I was expecting something like this all along. The constantly rising labour costs were, at some point of time, going to make India a less attractive destination for BPO operations. Also, emerging economies like the Philippines, Malaysia, Vietnam and Eastern European nations including Hungary and Poland are also starting to challenge India’s leadership in offshore Business Process Outsourcing (BPO).
And I have not mentioned China yet. We all know how the Chinese build industries. They too are now emerging as one of the major challengers to Indian dominance in this industry. Factor in a possible recession in the USA, and I can’t help feeling that we are heading for a slowdown in the IT industry.
CNN-IBN further reports,
However, industry leaders dismiss the retrenchment of more than 500 IBM and TCS employees across the country as routine – a part of quality control.
You underperform and you get sacked. They say it has little to do with the rising rupee or the slowdown in the US economy.
Customer XPs CEO, Rivi Varghese says, “As an industry grows higher up the chain, it is but natural that a small percentage of the people will not be able to keep pace with that. So it is a question of expectations not being met.”
I only hope that this is the case.
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6 responses so far ↓
Jennifer Lancey // February 10, 2008 at 7:10 pm
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.
Jennifer Lancey
Krishna Aradhi // February 11, 2008 at 8:09 am
@ Jennifer
Thanks for your compliments! It’s great to hear that you liked my blog. Keep visiting!
Liju Philip // February 11, 2008 at 7:02 pm
The IT industry has matured. India’s IT industry is not the one that was in the 90s. I dont feel the govt needs to hand hold it anymore. The STPs have long run its due. Now its for the IT companies to do their bit and show the world their mettle.
Churning goes on in any industry. The sackings in TCS and IBM was just what happens every year. Just that it got reported this time by our media that is so starved of some breaking news. The IT companies still grow at more than 25% per qtr which is unmatched by any other industry in India.
Also India holds on to more than 60% of the world’s outsourcing market. Other countries are surely picking up, but then we are not sitting idle either. Anyway IT is past the prime. The future careers are in finance, retail, investment banking, real estate etc.
Krishna Aradhi // February 11, 2008 at 7:53 pm
Yep, it’s time to tighten the belts. Our IT industry will probably keep growing for the time to come, but our market share will surely take a hit. We just have to face it.
jai // March 22, 2008 at 7:18 pm
Its not a slowdown , its just right sizing like in the game “Tetris” …After september or after US general elections you can see a turnaround in the IT space… but obviously only “established” players can go thru the present turmoil….
Jobs India // July 1, 2008 at 11:03 am
Yes the effect of US down is now spreding world wide as various indian mncs feeling the heat of US slow Down.