Forward by Deepa
Bangalore: Suffering to counter the economic slump, Indian IT majors are now reducing the number of onsite work force as many major customers tend to cut their IT budgets and focus more on offshore projects to bring down the cost. Largest IT firms in India such as TCS, Infosys and Wipro are cutting back onsite employees between three to five percent and even more depending on the projects, reported The Economic Times.
Based on the new trend, onsite roles like manager, requirement analysis professionals and tech employees involved with development of technical specifications with a customer are being brought offshore. "The customers are asking for more savings, attempting to have fewer people on projects wherever possible. We are obviously under tremendous pressure to bring back these roles offshore," said a Senior Executive involved with delivery of projects at a top Indian tech firm. As offshore works from countries like India need billing rates which are less than half of the costs in U.S. and UK many major outsourcing customers such as GE, RBS and Bank of America plan to focus on offshore outsourcing. "We will have to move more work offshore, and the question really is about how much more we can deliver remotely," said Sambuddha Deb, Chief Global Delivery Officer, Wipro.
Recently, RBS has cut down the number of onsite staff in UK by almost one third, and expert says that the company has relocated many employees at its Indian captive center. RBS is also pushing Infosys, to which the Bank gives work to outsource, to do more from offshore centers and is also shifting more positions to its captive center in Delhi.
Industry officials had earlier mentioned that Indian offshore vendors could bring back hundreds of professionals from the markets of U.S., UK and other European countries. A top executive, who requested anonymity said, "Each of us (top five Indian tech firms) have few thousand professionals working onsite, the pressure to move offshore will result in over five percent reduction of onsite exposure, which might come down to around 10 percent, from 15-20 percent currently."
Moreover, the Indian outsourcing firms are also under pressure to consolidate dedicated offshore delivery centers. "With customers now slice core and non-core work, they are looking at ways to reduce the total number of professionals being billed, thereby putting pressure on the dedicated centers," the executive who did not wish to be quoted said.
Customers have now begun to ask about the total number of people work in a project. "We are now receiving queries about the exact number of people working on a project apart from many other specific details, which the customers never asked," pointed out a Manager with a leading offshore firm based in UK who did not wish to be identified.
New strategies adopted by foreign customers are expected to affect the revenue of Indian IT majors. "Infosys' EBITDA is expected to decline from 31.4 percent in 2008 to 23.6 percent in 2011, while TCS could see its margins go down from around 26 percent last year to 18.2 percent over next three years. Wipro is also expected to see its EBITDA decline from around 20.1 percent last year to 13.5 percent by 2011, finds an Anand Rathi Research.
Wednesday, December 24, 2008
Indian IT majors cut onsite staff
Thursday, December 18, 2008
New Openings and Layoff news from India - Dec 18th: Update
Forward by Divakar
TCS to honor hiring commitment, says no "pink slips"
Hyderabad - India's largest tech firm Tata Consultancy Services (TCS) said it would honor all employment offers made to college graduates and had no plans to hand over "pink slips" to current employees despite the ongoing global economic slowdown.
Accenture Profit Rises 26% on Outsourcing Demand
Accenture Ltd., the world’s second- largest technology-consulting firm, said first-quarter profit rose 26 percent after the company won more outsourcing contracts.
Telesoft sets up telecom lab in India
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Stanford sees huge opportunity in India
Bangalore: "The transformation of 'call-centers' into 'data-centers' and then into 'data-center hubs' would become an eventuality in the years to come," says Balaji Prabhakar, Associate Professor, Dept. Electrical Engineering and Computer Science, Stanford University. Identifying India to be the next potential hub, the 10 eminent professors from Stanford provoked thoughts of techies on innovation and research developments at 'The Stanford Engineering Symposium - India', organized in association with SiliconIndia here today. Click here for complete story.
HCL Technologies completes Axon acquisition, becomes major global SAP player
New Delhi - Tech major HCL Technologies Ltd said it has successfully completed the acquisition of UK-based SAP consulting firm Axon Group Plc. (Axon) in a £441.1 million all-cash deal and has merged the HCL SAP practice under Axon leadership.
Layoffs in India
Hexaware - firing senior people
Source: post from a reader
Every friday evening between 5 pm to 6 pm at least 4 senior members get a call from HR manager. A resignation letter is kept ready in front and is asked to sign. Absolutely no notice given. Within a minute you lose all access and you are jobless. No room for gratitude… no respect for the hardwork earned from the employee. The act is like taking disciplinary action against the employee. Imagine…. if this is happening to someone who had spent more than 10 years who was treated like a king when his skill was requried for the growth of the company. The new CEO who has joined Hexaware from Wipro is axing people like he is cutting trees from his garden.
After Wipro, he has come to Hexaware that ranked 6th in Best employer survey - DQ in 2006. For him Employees are commodities not human resource with blood and Flesh.
Six months back there were 2 rounds of layoffs when the IT slow down started due to which there were heavy attrition and the company lost all good resources. To stop this further the top management wanted to spread a positive message and convened to the middle management that there will not be anymore layoffs. They were trying to kind of justify why it happened. However behind the screen they are axing people silently but cruelly
Motorola issues pink slips to 100 employees in India
Mumbai/New Delhi: US mobile phones maker Motorola is learned to have issued pink slips to at least 100 of its 4,000 employees in India.
Flurry of top-level exits in Satyam
NEW DELHI: Satyam Computer Services had seen a flurry of top-level exits in it’s IT and BPO businesses, including Satyam head of strategy Shailesh Shah, before the Maytas buyout decision was taken on Tuesday. In September, Venkatesh Roddam, the CEO of Satyam BPO, the wholly-owned subsidiary of Satyam, put in his papers.
