IT industry slowdown notwithstanding, hiring to continue

Speaking on the sidelines of the India Economic Summit, IT bellwether Infosys Technologies co-founder and co-chairman Nandan Nilekani said India's IT companies are bracing for "unprecedented" challenges and is responding to the decline in outsourcing orders and fall in earnings by adopting cost optimizing measures.

However, Nilekani allayed fears that the current financial crisis will drastically impact the IT job market. "Companies will continue to recruit. We are going ahead with the recruitment plan. I think it will continue," he said.

"I am sure the companies are following the right strategies. They are waiting for the things to subside and take advantage of the next cycle of growth," he added.

Nilekani has also brushed aside fears that US President-elect Barrack Obama would put his foot down on outsourcing when he assumes office. Obama, during his election campaign, gave hints of a protectionist regime, saying he would give tax breaks to "companies that hire in the United States and end tax breaks for companies that ship US jobs overseas."

"It is too early to comment on this. We have to wait and watch for the time being," Nilekani said.

Agrees Kris Gopalakrishnan, CEO, Infosys. "There is not any trend or anything like that," he said.

According to Gopalakrishnan, the global economic slowdown has lead to decline in outsourcing orders, affecting India's IT industry, but it is "temporary."

"We are still adding people. We will be recruiting 25,000 people," he said. "We will make our people prepared for the upturn, which will happen. We are focusing on recruiting people and training them. We are focusing on education as this is a great opportunity to make a positive brand and image for the company. We are still seeing opportunities in the market."

"The IT services industry will emerge stronger as after the crisis because the global delivery model that the industry follows, and also, the IT services industry has reached a certain scale, maturity, strength and world class practices," he added.

Agrees B. Ramalinga Raju, founder-chairman of Satyam Computer Services.

"The IT sector has always managed to lay a stronger foundation for a better future from any crisis it faces," Raju said.

The reassuring comments come amid news that India's IT-BPO industry, which enjoyed about 30 percent growth in previous years, is expected to grow at 21-24 percent this year due to the ongoing financial crisis.

According to the National Association of Software and Service Companies or Nasscom, the consortium that serves as the apex body of the Indian IT software and BPO industry, India's IT services companies and BPOs are expected to hire about 200,000 people by next March, instead of the 276,000 that it originally projected. The revised figure represents a significant decrease from the 250,000 new hires recorded for the previous fiscal year.

While Infosys is expected to hire about 25,000 employees in the current financial year (FY09) across functions like IT services, BPO and consulting, bigger rival Tata Consultancy Services or TCS plans to hire 30,000-35,000 people and Wipro and Satyam Computer Services intend to hire about 14,000 and 18,000 people respectively.

TCS, Infosys, Wipro and Satyam are the four biggest companies in India's IT-BPO industry, having a total workforce of 372,333 employees as on September 30, 2008.