IT Outsourcing India

India’s information technology industry should start hiring in the US to help in its economic recovery as the US is always going to be its biggest market, the industry association’s head has suggested.

The restrictions on H1B visas in the US “absolutely is a concern,” Pramod Bhasin, president and chief executive of outsourcing firm Genpact and the new chairman of the National Association of Software and Services Companies (Nasscom), said in an interview with Forbes Asia.

“We’ve met the concerned people in Washington and expressed our views. Any abuse of the visa system must be stopped, and Nasscom will help to do that,” he said.

“That said, I believe that we should be hiring in the US and thereby participate in its economic recovery,” Bhasin was quoted as saying. “Several of our companies are already looking to create employment in the US It’s the ideal time to get the best talent.”

Asked about Nasscom’s strategy to address the protectionist wave in the US, Bhasin said there’s a lot of protectionist noise today, but the Indian industry “should respond to the reality, not the rhetoric.”

“American companies are not going to turn away from global intellectual capital. The US is always going to be our biggest market,” he said.

Calling backlash against outsourcing due to layoffs around the world as “a big issue that we’re facing,” Bhasin said Indian “industry isn’t responsible for these layoffs, which have been caused by other factors.”

 “We’re working with governments around the world to make ourselves heard. We bring real value to global companies, and it would only hurt them if they dispensed with our services,” he said.

Asked about the industry outlook for this year, Bhasin said last October they had estimated an annual growth of 13 percent over the next two years after ending the last fiscal year with an overall increase of 16 percent. But that’s “no longer achievable.”

“Although we expect to grow at a lower pace this year, our sector will still outgrow other sectors,” despite the recession as “the fundamental premise of our business remains unchanged,” he said.

“We see ourselves as part of the solution to the global recession,” Bhasin said noting “that ours is still a small industry; our biggest firm has revenues of only $6 billion. We still have a lot of runway ahead.”

Source : http://www.newspostonline.com/

MUMBAI: The Indian IT industry, already under pressure since the downturn began in the US financial, banking and insurance markets last year, is likely to see around 75,000 job losses this year, according to senior executives of leading software companies.

President Barrack Obama’s policy on outsourcing
had prompted some technocrats to estimate the extent of possible job losses in India to around 50,000 in the first half of this year itself. These job losses would be across the sectors such as IT, ITES and BPO, they added.

“As on March 31, 2008, there were 550,000 direct jobs created by the IT industry in Bangalore,” said Infosys board member TV Mohandas Pai. “I would estimate close to 30,000 IT professionals, earning an average salary of Rs 5 lakh per annum, would have lost their jobs between April 2008 and March 2009 in Bangalore.”

Mr Pai also said that for financial year 2009-2010, an additional 25,000-30,000 jobs may be lost in Bangalore alone. “These job losses are due to the fact that many companies have shed excess capacity, as the growth rates of industries have decreased. It is possible that a fair number of these people would have found jobs in other industries, too, during this time at a lesser salary,” he added.

While understandably, Bangalore as a hub, is expected to see significant job losses, other centres such as Chennai, Pune and Hyderabad could also see an impact.

Ravi Ramu, CFO of realty firm Puravankara and former CFO of MphasiS said about 50,000 jobs could be at risk next year. However, what worries him more is the spin-off effect that will see a lot more losses. “Every direct job in BPO is supported by six indirect jobs. In reality, the spin-off will be even more negative.”

Even though, IT bigwigs are concerned about the high-rate job losses, IT lobbying body Nasscom, doesn’t think so.
According to Nasscom president Som Mittal, earlier retrenchment was not on such a large scale, as attrition was high.

“Companies are stressing more on performance issues in these times, as they want to increase productivity. The coming times are uncertain and people are not hiring in large numbers as before. There is already a wage moderation that is happening across the industry and this will definitely reflect on the spending,” he told ET.

Mr Mittal is of the view that the IT industry could see a high single-digit growth to low double-digit growth in financial year 2009-2010. According to Nasscom estimates, IT exports contributed around 5.5% of India’s GDP in 2008-2009, against 5.2% last year.

Wipro executive V-P (HR) Pratik Kumar maintains that net job adds are lesser than last year, as the IT industry has not grown at the same pace as in 2008.

Nasscom said that India’s ITES sector, which has been growing at 30% over the past few years, could see a growth of 16-17% in the current fiscal.

Source : http://economictimes.indiatimes.com/