Date: 2011-08-08
Place: Bangalore
With the American credit rating facing a downgrade, fear ripples have already overtaken sections of the city's major IT parks as experts foresee downsizing and pay cuts
Recession fears have returned to haunt the IT corridors of the city with a vengeance, as if to unsettle survivors of 2008. With the American credit rating facing a downgrade, ripples have already consumed many in the city's major IT parks as experts foresee downsizing and pay-cuts.
Experts from the stock market reveal that the markets are experiencing a knee-jerk reaction and investors are presently reluctant to invest. Meanwhile the BPO, IT and call centre industry are already abuzz with rumours of possible pay cuts. Fears of the pink slip phenomenon are surfacing experts and employees are awaiting a change of fate, if it happens.
Rumours galore
"For the last few days, the buzz in the canteens and at the work stations is about the downgrade. Everyone seems to be discussing the possible effects on the Indian markets and as programmers, we would be the ones directly affected," said S Jaspal, a programmer from a leading company. Meanwhile, with the news breaking over the weekend, several companies held official meetings assuring employees that no possible effect would be witnessed.
Markets hit
Stockbrokers and industry experts had a troubled weekend answering fervent client-calls about whether this downgrade would affect them. "The markets have faced a negative impact and are not conducive to investments now. The Indian success story would not be affected, but the export income will suffer," explained Kumar Jahagirdar, Member of National Stock Exchange.
Instilling hope
"At this point, I expect a 5 per cent fall in index, but if the NIFTY comes up to 4800-4850, it should be a good buy," said Manoranjani Girish, market expert. Experts on the other hand said that big companies like Infosys, Wipro and TCS would not stop getting orders, but everyone is going to be very cost conscious now.
Meanwhile, companies are on their toes reassuring employees that the country is ready for another recession.
"There are fears of another recession in the US and a debt crisis in Europe. We were able to react quickly in 2008 and these responses are still fresh in our memory. I believe that the industry will be able to withstand another downturn," said Kris Gopalakrishnan, CEO and MD of Infosys.
Fallout possibility
For freshers in the call centre/BPO drawing huge salaries, experts believe that this is going to be a realistic period. "The slowdown is imminent and organisations would now do away with high salaried employees and become more realistic. The salary of a BPO employee, which was quite high, up until now, will be cut down. IT companies would do away with highly experienced employees drawing huge salaries and employ freshers," informed Girish. Meanwhile, the BPO and IT companies are gearing themselves to face a slowdown or any negative impact.