March 2001. Twenty-six-year-old Sujit Banerjee holds an appointment letter from a US database giant. He has been holding this letter for the past two months. The company has told him to keep waiting. Payal Srinivasan received a call from her US employer a few hours before she was to board the flight, asking her to hold on. For people like Payal and Sujit, the wait may turn out to be endless. And many of their friends who made it to the US at the height of the IT boom have also see their silicon dreams crumble. Jobless in Seattle, they now look back home for help. The US slowdown can no longer be ignored.
Airport transit lounges aren't filled with "software agents" anymore. Headhunters who received not more than two CVs a month from a candidate in the US, now get more than 20 a day. The American fantasies have turned sour for a significant number of the 4,50,000 H1B visa holders largely employed in hi-tech industries.
Says Dony Kuriakose of search firm Edge: "The worst hit are those who went through bodyshoppers for low-value jobs." Bodyshoppers would hire a bunch of programmers from India and pay them a monthly salary calculated on an hourly basis. They would then hire them out to companies which had projects going. "The bodyshoppers commoditised skill sets and when a company wanted to downsize, these project workers were benched first," says Kuriakose.
A "benched" person is without work, but not without a job. And while he waits to be put on another project, his company is supposed to pay his salary. Even bodyshoppers are obliged to pay their benched workers a salary but more often than not, they pay a stipend that's too small for out-of-work people to survive. Some unscrupulous ones didn't even pay for airfares back home.
But while bodyshoppers blatantly went back on their commitments, companies too handed out pink slips to the benchers after a few months or relocated them with salary cuts. A US firm has relocated 250 employees to southeast Asia with pay cuts. These hourly-wagers were mostly people who had done a quick Java course from one of the many mushrooming computer institutes and had been picked up by bodyshoppers for low salaries ranging between $4,000 and $6,000 a month. The companies never invested in these people: no training, no upgradation of skills. They were, in fact, referred to as "software coolies", doing the grunt work, any work, as long as it was in the US. Shady institutes and bodyshoppers fed off this greed.
Prem Talwar, 30, married with child, answered an ad that promised $55,000-a-year US jobs. The advertiser was a training institute. Talwar quit his stable job and exhausted his savings, paying Rs 1.5 lakh for the course offered. Today, six months later, he has neither gone to the US and nor has he learnt much. The institute did not have a permanent faculty; students were rushed through the course. Talwar is now working with the institute as an instructor and is yet to be paid a salary. "No one ever bothered to check the credentials of bodyshoppers. It was just chalo America," says a placement consultant.
Bucking the trend are those who joined companies to work on products as opposed to projects supplied by bodyshoppers."The choice was always there: money and projects versus career and products. Anyone today with four-five years experience with product lifecycle knowledge is still of great value," says Kuriakose.
What does the potential return of thousands of prodigal sons mean for the desi job market? "The auctioning of talent will stop. Earlier, companies would hire first and then look for projects," says Sanjeev Bikchandani, ceo of jobs portal naukri.com. Despite efforts to downplay the problem, there is enough to indicate that the US downturn has created a manpower surplus in the Indian IT market. Fresh Java programmers, who were earlier getting salaries of Rs 20,000, now come for Rs 4,000 and Rs 5,000. Even blue-chips like Wipro and Infosys have frozen recruitment and have benched people.
Dozens of smaller firms have started laying off staff. Bangalore-based Aditi Technologies, heavily dependent on US business, has shut down its sales and marketing offices in the US and laid off an estimated 35 people in India. Normally the company would place at least 20-25 engineers in the US every month, but now placements are a five-a-month trickle, if lucky.
Says Dilip Ranjekar, corporate executive VP-HR, Wipro Infotech: "Wipro has seen no major fluctuation in either recruitment or employee attrition." Says S. Gopalakrishna, deputy managing director, Infosys Technologies: "These ups and downs are part of a business cycle. Things had heated up too fast, it will now be a time of slower growth." But employees remain apprehensive. Says a Wipro engineer with six years' experience: "The performance incentive portion of our salaries could drop this year, as projects are fewer now."
The US downturn has also led to undercutting in the Indian market. You hear of US firms moving projects from one Indian firm to another if they are offered a 30 per cent discount. Last December, placement agency 3P Consultants had done a deal for 25 people to be sent to a US company at salaries between $60,000 and $110,000. "But two weeks before the recruits were supposed to fly out, everything was called off. We then tried to place them with a Singapore client, but that too didn't work out," says Nirmit Parekh, managing director, 3P. He has deferred his plans to set up a Bangalore office.
With the US market in turmoil, software service providers are now looking at Europe. Salaries are at least 20 per cent lower than the US, but then, given the extent of IT vacancies in Europe, salaries may see an upward trend. There are approximately 40,000 vacancies in Germany, and 1,00,000 in France. Europe is not hugely impacted by the US downturn because only 5 per cent of its software exports go to the US. Many EU countries are liberalising their immigration norms to attract Indian talent. Indians are willing to even go to countries like Poland and Malayasia at salaries a little higher than what they draw in India.
While jobs are still available, the sheen has slightly worn off the IT professional. But, says an industry insider: "The current crisis cannot be likened to the dotcom bust. Dotcom was a mania, this is an economy going through a cycle." However, it's going to be at least another six months before the cycle visibly turns. By Gauri Bhatia in Delhi and Archana Rai in Bangalore With Charubala Annuncio in Pune
