INFORMATION TECHNOLOGY

White collar, no work

The IT sector is the biggest provider of white collar jobs by some distance. According to the Assocham survey, the sector generated more than 66,000 new hires between January and March 2012 and just over 46,000 between April and June 2012. The next biggest employer was academics— schools and universities are still a booming sector— generating just under 9,000 jobs between January and March and just over 13,000 between April and June, only 15- 25 per cent of the jobs created in IT. What happens to growth in IT is therefore crucial for the employment prospects of a very large section of the middle class.

In Infosys, many employees are simply sitting on the benches with no work. Infosys CEO S. D. Shibulal told a newspaper in August, “We are quite uncomfortable with this ( benching of so many staff). It is not a strategy, but when we do not see that kind of growth we saw earlier and when revenues and topline are falling, people get benched.” Infosys has, however, not changed its original plan of hiring 35,000 new people, with 13,000 for BPO operations alone, in this fiscal year. However, that figure is 22 per cent less than the number for 2011- 12. Also, those hired for jobs may have to wait before they are absorbed. Infosys has announced that it would delay bringing on board nearly 28,000 engineers hired from campuses to as late as July 2013. Other firms are also deferring hiring. iGate has delayed fresher joining dates of around 1,000 engineers by three to six months. “Close to 1,000 freshers, who were expected to join in

THE SLOWDOWN IN THE US AND EUROPE HAS HITTHE IT SECTOR HARD

July- August, will now join by the end of September or October,” says Srinivas Kandula, HR head at iGate. “If the economic situation worsens, we will have to delay it by another quarter,” he adds.

The IT industry’s apex body, NASSCOM, expects the sector grow by 14- 15 per cent in 2012- 13, compared to 3040 per cent annual growth levels recorded in the mid- 2000s during the global economic boom, and 18 per cent recorded in 2011- 12. Independent analysts of the sector are less optimistic than the industry. The average projection by analysts for growth in IT services in 2012- 13 is just 5- 6 per cent.

The fate of India’s IT is closely tied to growth prospects in advanced economies. More than 60 per cent of the IT industry’s revenues come from the US and Europe. Europe is still caught in a serious debt trap— growth is unlikely to be in positive territory for the next six months. The US is doing marginally better, growing at just over 1.5 per cent. But with presidential elections imminent, there is pressure on American companies to go slow on outsourcing.