To hit Bangalore, it looks like the global economic turmoil and the dramatic Wall Street meltdown is beginning. In India’s outsourcing hub it used to be one big Googlefest with all the pampering and cosseting that employees enjoy at the company’s Googleplex headquarters in Silicon Valley. They do not know what the latest from Googleple, but in Bangalore it is sure to looks like the party in slowing down. In a city where residential communities like Silver Manor, Golden Enclave and Platinum City sprouted to house thousands of young, upwardly mobile technology workers, instead of 200 million-rupee homes, the developers are now beginning to market 2 million-rupee condominiums.
Including the Bangalore branch of the Indian Institute of Management schools, the departmental stores sport sale signs every other week as credit card-happy tech workers are cooling off consumption. The technology outsourcing firms, multinationals and Wall Street banks used to slug it out for the day zero spots during placement week. The exercise is months away. However the schools are already planning to offset an expected slowdown in the placement by inviting more companies. Among the outsourcing companies, the collapse of top US financial firms will cause a dramatic slowdown in hiring among outsourcing companies. The banking financial services and insurance sectors account for 40 percent of the revenues for India’s $52 billion outsourcing industry as of they year 2007-2008.
To Indian Technology services companies, firms as now bankrupt Lehman Brothers and bought out Merrill Lynch were big customers and provided million of dollars worth of lucrative contracts to Indian technology services companies. In the past home-grown the Indian outsourcing companies grew by impressive numbers. During the recent years, the Infosys and Wipro is the big two employers in Bangalore were each hiring 10,000 employees or more during the recent years. The spectacular ramp-ups are unlikely to recur anytime. One large call center with the European and US customers in now refusing to hire anybody that does not stay within a five mile radius of their centers, the costs are just too high.
In Bangalore, for tech employees, jobs no longer come with a life time guarantee. The companies are shedding people in small number and keeping their actions under the radar. The biggest indicator of the slowdown is the salaries and raises, it is used to be acceptable to have lateral hires ask and get 30 percent increases on their previous salaries. The annual hikes have varied between 15 to 40 percent in the good years. It is now a thing of the past, wage increases are now down to more realistic, single-digit numbers. The successful one have already been doing the list.
REFERENCE:
http://www.zdnet.com/news/indias-outsourcing-bubble-is-bursting/238208
