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As global turmoil reaches Pune, city’s IT hub rocked by layoffs

As many as 10,000-15,000 people may lose jobs in Pune, warn industry watchers.

Written by Partha Sarathi Biswas | Pune |
May 21, 2017 12:15:56 am
global turmoil, pune, city, it hub, layoffs, jobs, it industry, it sector, pune it hub, pune jobs, pune it jobs, information technology, india, companies, nasscom, india news, indian express news More than 3 lakh people in Pune directly depend on the IT sector for their livelihood.

A few weeks ago, when Abhijit Parasnis received a call from the HR department of the IT firm he worked in, his heart skipped a beat. And not without reason. Parasnis, a mid-level manager with a major IT company, had not had a project for a few weeks and had heard rumours about possible layoffs by his company. “My interview with the HR was short… I was asked to put in my papers as the company had undertaken a massive drive to downsize manpower,” he said.

Parasnis, who had worked for around four years with the company, had no option but to resign. “I am yet to repay the home loan that I had taken six years ago. With my 10 plus years of experience, it will be difficult for me to get a job immediately, as most of the companies are reluctant to hire at the moment,” he said.
For now, Parasnis has started looking out for jobs in other cities like Bengaluru and Hyderabad, but the chances of finding a job there seem to be slim as well.

For the $350 billion-strong Information Technology (IT) industry in India, the year 2017-18 is not going well. A global slowdown, increased automation and clamping of visa restrictions by multiple countries has resulted in an unprecedented crisis in the industry. In order to manage the crisis, companies have started massive layoffs which, say industry watchers, could hit as many as 2 lakh employees per year across the country.

More than 3 lakh people in Pune directly depend on the IT sector for their livelihood, with the city being home to over 800 companies — large, medium and small. Last year, IT exports from Pune had clocked a whopping Rs 67,000 crore and maintained 10 per cent year-on-year growth. However, the recent turmoil in the industry has made its effects felt in Pune, as people like Parasnis and others come in the line of fire.

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While IT companies in Pune refused to give region-specific figures about layoffs, industry sources said the number could be anywhere between 10,000-15,000 for this fiscal year. Most of the layoffs are likely to be at the mid-management level, and people with over seven years of experience, but without any projects in hand, seem to be under the scanner. Infosys, Cognizant, Wipro, IBM and other companies, which had talked about lay-offs across the country, also have large set-ups in Pune.

The layoffs, as per NASSCOM, are being seen as an industry-wide trend. “One needs to understand that most companies hire on the basis of the business they accrue; so, layoffs are part of a company’s internal process, where they take a re-look at their priorities and align talent. There is disruption taking place across the industry, with an emphasis on moving away from quantity to quality, “ said the spokesperson of NASSCOM.

A senior industry watcher, speaking on the condition of anonymity, said the layoffs — current ones and the ones in the pipeline — are also a sign of large companies trying to ‘correct their expenditure’. “Mid-sized companies have not reported any layoffs. In larger companies, recruitments used to happen in anticipation of work. As work dries up, employees are laid off, “ he said.

Mid-level managers are more vulnerable as a majority of them have specialised in technologies that have since been upgraded.

However, Gautam Rege, co-founder of city-based Josh Technologies, has a word of assurance, as he believes that the industry will stabilise in the long-run. “Digital India and the government’s heavy emphasis on IT will surely help the industry find newer markets,” he said.

While acknowledging the crisis in traditional markets of US and UK, NASSCOM said newer opportunities and newer markets would be discovered in the IT sector.

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