IT sector layoffs: Growth stunted, engineers stuck in a groove; will govt jobs help?

When 25 year-old Taran Sikka finished his BTech in mechanical and automation engineering in 2013, he considered himself 'lucky' to have landed a campus placement in Wipro. "However, I did not gain any technical prowess during my 24 months with the software giant and the lack of growth opportunities made me worry about my future," said Sikka in his testimonial. "I was dejected as everyone has some aspirations and dreams and my future seemed bleak with the company. Meanwhile, I was considering giving CAT and GATE but I eventually settled for the banking sector." Sikka now works for a public sector bank.

Many IT job hopefuls and those who have worked for a few years in the sector have been shifting tracks from the minefield that the IT sector has become. Over the last few years, the sector, once a major job creator, has been on a downhill ride, with global slowdown and fast changing technological landscape taking a toll on its job creation potential. In order to adjust to the the new scenario, the companies have been keeping the employees on the bench, setting impossible targets for the staff using skill upgradation as an excuse and even laying off the staff on large scale.



IT sector staff are wary after the news of layoffs at majors spread over the last few days. Forget growth prospects, they are now worried about whether they will have a job at all. "My main worry is that I will have to give up my house if I default on the payments. I have three years left to pay back the loan but my job looks risky now," said Ramesh Natarajan (name changed on request) who works for an IT firm. He has been on the bench for a month now.

A mid-level IT employee told Firstpost that the IT majors have reached a position where they are attracting global talent on the back of the work done by Indian IT talent. "The top level men and women take home handsome salaries. They may not pay us hikes but why have this Damocles sword of losing our jobs dangling over our heads?"

Whither IT jobs

The industry is not being ruthless when it lets go off its employees. On the contrary, it is playing to the supply-demand quotient. “You can be a good coder but that does not mean when you are promoted after a few years as the project manager, you will be good at that too. The earlier job role is now changed to managing people and making time tables for them which does not really require any of the technical skills you were good at,” said Kris Lakshmikanth, Chairman and Managing Director at The Head Hunters India; and ‎visiting faculty, Institute of Management, Ranchi.

He quotes the Peter Principle, according to which a person who is competent will be promoted to a higher position where he will not be able to perform as that is not his area of core expertise.

The IT industry has shifted from yearly performance appraisals to monthly appraisals and those who are found to be unproductive or not able to grasp the new technology are being sacked or given ‘difficult’ targets to achieve on a skill upgradation programme. “It is known that the targets are impossible to achieve,” said an analyst.

James Agarwal, managing director, BTI Consultants, said the IT sector is going through a churn and senior hiring will slowdown in the short run. "When compared to last year, we are seeing IT companies focussing more on hiring leaders who have had multi geo experience in handling projects. We are also seeing a trend towards fixed salaries not seeing a lot of change when compared to the variable component. Overall, we expect leaders in IT to move towards performance-based incentives," said Agarwal.

Govt jobs to the rescue

The government job sector seems the safest and reliable for IT hopefuls with banking seen as the most secure, says Abhishek Patil, CEO, co-founder, Oliveboard - an online test preparation platform for MBA and government job exams like banking, UPSC, etc.

The reasons for the sudden shine to this sector are many. Primarily, it is because the entry level salaries in the IT sector have remained stagnant for a few years now. Most IT firms continue to offer packages of around Rs 3.25 lakh to Rs 3.50 lakh at entry levels and this has remained the threshold for over 7 years now. Effectively, this means that with inflation not being factored in, salaries have eroded 50 percent over the past 7 years.

The government sector seems attractive primarily for the job security it offers, says Patil. "The pay structure at low levels and officer levels at the government sector is clear. An assistant level clerk job gets paid Rs 20,000 but perks are higher. At the officer level it is Rs 45,000 which is higher than what Infosys would give an IT graduate at that level." It will take 8 to 15 years for an Infosys employee to get this salary.

Another reason for the government sector appearing attractive is that the banking sector creates 50,000 to 60,000 jobs every year, says Patil with anticipated retirements and voluntary retirement hopefuls. Government jobs offer many other benefits besides definitive weekly leaves, public holidays and also other government benefits.

So will the tech finesse bought in to the IT sector by India's tech graduates who are now being eased off by the sector be the government's gain? Time will tell.


Updated Date: May 12, 2017 19:32 PM

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