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PHOTO: SHAJU JOHN

CONFIDENCE OR BRAVADO? Most infotech employees feel the bad news will not hit them

John Donne

When there is economic pain in the main (read U.S.) it hurts here also. No, the pain is not of the same level as the dotcom bust era but the painful memories are being discovered as a multiplicity of economic factors create a pall of doubt in the minds of infotech workers. It is not just the swirling oceans of red ink lapping the Indian shore, but strengthening rupee and a host of other factors that includes plain bad timing.

This week has been a bad news week. If TCS has announced that it is reducing the variable pay of the employees due to the strengthening of rupee, then Yahoo has announced it will handover pink slips to 1000 employees, and on Wednesday, a sliver of fear appeared in the world of highly paid BPO workers of a Swiss bank when it announced writing down $14 billion.

“A bit disappointed and surprised yes. But nobody’s hitting the panic button yet. Moreover it’s not such a big drop (cut in variable pay) that people will start quitting. People who have stuck on in TCS for years have done so because of the Tata heritage which has always been and always will be employee friendly. Am sure most of them know that the moment the company’s targeted profit figures are met or exceeded, it will result in the money coming back to employees in the next quarter,” says V. Sadagopan, a TCS employee.

“Most of the doubts about job losses is bad information and rumour. I don’t think there will be job losses, but yes there some employees who are now scared,” says Sunil Kumar who works in UBS in Hyderabad.

From the gung-ho employee optimism to a dash of realism. Bhavani, a Microsoft employee, puts things in perspective: “It’s an expected change (salary cuts). Since (almost 80 per cent) of the revenues are from US markets these companies revenues are tightly coupled with the market dynamics of West, no wonder when the dollar weakens and US economy slows down there is a direct impact on the employee salaries. Although this came as sad news to employees, this is acceptable since it is variable pay.

I have very close friends in TCS and some working in our own building as contract employees here feel that this was foreseen but not so early.” “This is also a lesson for companies to explore markets in Middle East, Japan or even Europe and try to balance the margins by tapping the markets in booming economies, which companies like Satyam have already started,” he says expecting brighter days of growth.

“With this looming downturn there might be some pruning. A number of IT firms are into competitive hiring. They hire the employees and keep them on the bench. The situation is such that they even have a team manager for the bench,” says P. Shashikant who has just left one IT company for greener pastures.

The fear of IT downturn is not shared by everyone, some people like K. Raghuram sees the sunny side: “The infotech sector is not the be all and end all of Indian economy. If IT is affected, then a few service sectors may take a hit. The unrealistic realty prices will come down, which in itself would be a good thing. Interest rates on housing loans will come down.”

As the Sensex yo-yos and ignorant pundits predict doom, it is good to know that all the economic eggs are not in one basket.

• Sub-prime crisis: High-risk housing loans in the U.S. given to people with doubtful credit rating. When these people fail to pay up, the banks take a hit.

• Strong rupee: In 2002, an American could buy Rs. 49 per dollar, now the same currency gets only Rs. 39.

• Oil price: Oil prices are at a historical high. The strengthening rupee has helped India, but has hurt the economy worldwide.

• Sensex yo-yo: The losses in the stock exchange are notional. Unless you turn greedy.

• High interest rates: The U.S. Fed has cut interest rates to 3 per cent. India has double digit interest rates. Where will you invest?

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