Not surprising since I've been seeing the changes. It just depresses me to see growth reduction which could have been avoided to a certain extent.
Sluggish days ahead for IT-BPO industry
By BPO Watch News Desk
Bangalore, Tuesday, Aug 12, 2008: Industry experts are painting a rather grim picture for the IT-BPO segment for the rest of fiscal 2008. They predict lower growth rates of between 21 to 24 per cent, lesser number of new deals, salary freeze, cut in increments, minimal hirings and some lay-offs too.In the recent past we had about 400 employees at Convergys' Malad centre in Mumbai being asked to go following the decision to shut down the centre. There were also reports of Lehman Brothers letting about 25 per cnet of their staff at the captive centre in Mumbai go. Others like Patni Computers, 24/7 Customer, Keane India and Fidelity have already cut jobs.
Says Arun Jethmalani, CEO ValueNotes, “It’s a wake up call, for its clear the current business model cannot work with such high inflation rates. It will be tough to maintain growth and margins will be squeezed in the short term. What’s also worrying is that the number of new deals coming into India is one sixth of last year. Indeed, a lull in business acquisition and the downturn in the US economy is affecting us.”
But Sudhin Apte, Senior Analyst and Country Head-India, Forrester Research feels job cuts is not only because of these two reasons. “The industry is at a different level today compared to five years ago. Earlier recruitment was happening only from a few good colleges, now benches are being filled by candidates various institutions."
Some of them don’t match up in spite of training. It’s the under performers who are getting the pink slip. Most lay offs are among the bottom 5% of the appraisal list. Companies have realized they need to manage their bench better and cannot go on pampering their employees if they don’t perform, he feels.
As for the bottom line: The remaining seven months of 2008 are unlikely to show any improvement and we can expect to see more consolidation of staff. Good companies will use this time in training employees with new skills so that when the market looks better, they can get better value projects.
lyndlj
Pro 
It depends upon what they are supplying as to how bad the cuts wil be.
The first places that are targeted in any cutbacks are the call centres, this is due to the high turnover of staff meaning that they can trim any unwnted employees without the risk of paying out redundancy.