Indian IT firms see return of hiring, salary hikes

Many were predicting six months back that the Indian IT industry would be entering its twilight zone, but now there are indications that these predictions may go wrong. Several IT companies have restarted hiring and are giving salary hikes to their employees.

"That phase of drastic downturn is behind us," says S Ramadorai, CEO of Tata Consultancy Services (TCS). "There's stability now. The deal pipeline is encouraging, but the time it takes to close a deal remains long. And many customers are yet to fully open up their IT budgets," Ramadorai added.

While IT majors like TCS, Wipro and Cognizant have started promotions and salary hikes, Kris Gopalakrishnan, CEO and Managing Director of Infosys feels that things are looking better now, however the company prefers to wait and watch before giving any promotions or hikes, reports The Economic Times.

The recovery of the defamed Satyam Computer Services under the new owner Mahindra Satyam has also proved to be a boon for nearly 28,000 employees across all levels, with the restoration of the variable pay. The variable component is 10 percent at the entry level, 20 percent at the middle level and 30 percent at the senior management level. IT bellwether Wipro has lifted its freeze on hikes and promotions, at least for some employees.

Manpower supply company TeamLease, which saw its open positions drop significantly from 10,000 a month to 800 post-recession, has in the past couple of months seen those numbers rise to 3,500.

With the current trend companies have also started showing more confidence in the Indian market. Information infrastructure company, EMC has announced that it will invest $1.5 billion in India over the next five years, a level of investment from a single company that the sector has not seen in close to two years. Partha Iyengar, Regional Research Director in Gartner India, says the number of calls the company gets from customers for directions and consulting has gone up sharply in the last 3-4 months.

The Indian IT industry was one of the worst hit by the recession on account of its dependence on international markets - especially the U.S. and European markets. The freeze on IT budgets by companies around the world meant that new orders dried up. Industry association Nasscom initially forecast that IT exports would grow by 22-24 percent in 2008-09, but as the recession deepened, this was revised down to 16 percent. For this fiscal, the association has projected a 4-7 percent growth to $48-50 billion.

Agencies

Will Infosys BPO layoff 600 contract workers?

The business process outsourcing (BPO) arm of Infosys Technologies, Infosys BPO, reportedly terminated the services of over 600 contract workers in a staff redeployment exercise in February.

According to the report -- which appeared in a business daily -- the workers, who were on multi-year contracts, included temporary workers, whose exact numbers are not clear.

Incidentally, Infosys BPO is also adding another 2,000 workers by the end of March, which will raise its headcount above the 20,000 mark from around 18,000 at present, according to the news story.

Though company spokesperson maintained that no employee on the direct rolls of Infosys BPO has been laid off. HR industry sources, however, confirmed the development. Infosys’ staffing needs contractors include Adecco PeopleOne, Mafoi and TeamLease.

The country's second-largest software company recently said that it is looking at acquisitions in the BPO and KPO spaces. “We are looking at back office functions where the companies perform very unique services with their own platform or intellectual property,” said Infosys MD S Gopalakrishnan. “There are opportunities in traditional BPOs as well and we are not restricted to KPOs.”

Captives in banking and financial services, manufacturing, and telecom are still considered hot property. “Our acquisition guidelines have not changed in this environment. We will acquire the strategic fit first and then growth,” said Gopalakrishnan, adding that the target company should typically have a revenue of about $300-500 million. Infosys is also looking at smaller acquisitions in the range of $100-200 million.

“There is always more risk attached to the integration of a larger entity. However, if something smaller or bigger comes along we will definitely look at it,” said Gopalakrishnan.

As the company continues to focus on geographically non-English speaking countries such as France, Germany and Japan, it is not averse to acquisitions in other locations. “These are not mutually exclusive with the services offered by the company. If there is an opportunity to acquire a consulting company in the US, we will look at it,” Gopalakrishnan said.

Indiatimes