Bangalore: The near collapse of the U.S.-led global finance system has ominous implications closer home. Analysts predict that the IT industry will go downhill in the coming year. Bangalore, with a multitude of IT majors as well as medium and small enterprises, will be no exception. After a string of quarters with soaring results, IT corporates have been caught flatfooted.
Recent reports in financial dailies estimating a loss of 20,000 to 25,000 jobs in India in the coming months have created panic among techies. Middle-level managers in several companies confirmed that layoffs are in the offing and that hiring is almost nil.
Performance improvement plans are being conducted in most companieswhich are seen as a precursor to a pink slip. Cognizant Technology Services has cancelled its mid-term appraisals, delayed promotions and denied arrears this year. After the collapse of the U.S. banking and financial sectors, the situation got worse because nearly 40 per cent of CTS clients come from this sector. “Managers have told us that the December appraisal will identify people to be sacked. The bottom 5 per cent (who will be the first to go), they say, will be expanded to 10 per cent,” says Shobha Raju, an employee. Last week, the CEO sent an email stating that revenues from banking have increased by 7 per cent. However, employees are sceptical.