Job Losses and Indian Reaction
The Recession has had a major impact on the Indian IT industry. Since most of their revenues are from external sources, when the world sneezes, the Indian IT industry catches a cold.
This sudden change in economic activity has given a bad blow to an industry that was trying to recover from a strong rupee, created by a booming economy in 2007.
Over the last couple of days I have been seeing reports of companies like Infy and TCS laying off workers. This is something I would have expected in any recession and with the kind of job losses US is witnessing, the numbers seem miniscule (Infy sent out 2200 workers, around 3.5% of the company).
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Obviously India being what it is, any retrenchment is seem as a major rich man-poor man issue. See what happened when Jet Airways wanted to trim their staff. It even became a political issue. So most IT companies say that they sent out under performing people. Yes, most IT companies do send out underperformer regularly and this is almost never reported. But this being a bad year, everything is news.
Seeing the responses/comments on articles relating to artilces on the Infy layoffs, I can see people bad mouthing Infy and its management. This show a lack of understanding of how businesses work. It is ok to be critical of any company. After all in a democracy, you have the right to your opinion. But most of these people did join Infy when offered a job that too at maybe 100 times the salary a normal Indian makes. What really makes me mad, is that these same people now talk about Infy being a bad company??
I see discussions around creating an IT union to fight this issue etc. I can see this become a political platform and easily cripple the growth of the IT industry as a whole.
Think about a situation where a company cannot every reduce its employees. It just increases pressure on the company to hire less so as to be safe.
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What can help the IT industry (or any other industry for that matter) grow?? Both the company/government as well as each employee has to work on things to make it easier to do business.
A few of my ideas:
1. Government or Industry - Allow companies to hire and fire easily and truthfully. Not cover things as firing underperformers etc.
2. Government or Industry - Create an unemployment pay system (something that will cover your salary for a fixed no of months, say 6 months). I guess the best way is to create an insurance product in this space. So when you work, you pay the premium every month out of your salary and after a minimum no. of years (say 5 year), if you loose your job the insurance covers your salary for some time. Instead of this being run by the government, as in the US, this can be better managed if run by the Insurance companies (LIC, HDFC, ICICI etc).
3. If you work in any private company, plan on being fired and save a fixed amount every month for an emergency fund. It is usually recommended that you save at least 5-8 months of your expenses in this emergency fund.
4. Always improve your skills. This helps you get a new job when you loose one.
5. Network with your peers. Either use events or user groups etc to meet and get to know other people in other companies or use the web, linkedin or other networking sites.
6. Don't ever talk foul of your ex-employer. It does affect your ability to get a new job.
(Cross Posted both in .NET From India and Personal Finance Ideas)
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