Wednesday, 21 June 2017

RETRENCHMENTS ARE BEGINNING TO HIT INDIA'S IT AND BPO INDUSTRIES

India's information technology (IT) industry and business process outsourcing (BPO) service providers were once hailed by the media as a miracle of sorts, the pride of India and the industry was India's largest employer or at least India's largest private sector employer, which employed millions of people and it was rather glamorous to be an IT workers in India.

Indian IT workers have also been a rather fortunate lot compared to their counterparts elsewhere in that Indian IT companies once maintained up to 20% or more of them on standby on full pay to be immediately deployed on projects as and when needed, but this practice is coming to an end in favour of short term contracts, as India's IT companies increasingly come under rising cost pressures.

However of late, India's IT and BPO services  industry have been retrenching workers by the thousands, with the "big boys" of Indian IT planning to retrench as many as 200,000 staff.

The commentator in the first video below gives a good analysis of the financial factors affecting India's IT industry in terms of the strengthening exchange rate of the Indian Rupee versus the US dollar. Since most IT or BPO contracts are quoted in US dollars to customers in the US and also in most other countries, a stronger Rupee vs the US dollar means that the company in India earns fewer Rupees in numerical terms, once those US dollars are repatriated to India and converted to Rupees. 

He also mentioned that with India's IT multinationals being compelled to hire more American workers at their facilities in the US at American pay levels, India's IT multinationals end up having to pay more in salaries than if they imported IT workers from India to work on H1-B visas, so to contain costs, they have to retrench their workers in India.

Why Indian Software Companies Laying off staff? complete analysis into current situation

However the solutions he gave are very much echo the often-heard cliched phrase "upskill oneself to move up the value chain", but in reality, how many IT workers have successfully managed to upskill themselves and have "moved up the value chain"?

Secondly, assuming they all can, will there be as many jobs "up the value chain" to absorb all that many upskilled IT workers, plus new IT workers coming out of the universities and colleges armed with the newer IT skills?

As real world experience has shown, in most cases IT companies will cast their old employees on the scrapheap and hire new ones at lower pay.

The rest of the videos below highlight the situation for IT workers in India and their collective efforts to fight back through tribunals, courts and on the picket line.

WION Special: Tougher times ahead for Indian IT industry

IT Sector Layoffs - Senthil from FITE explains the other side of the story!

Massive layoffs in IT companies – The Urban Debate (May 19)

Infosys, Cognizant, Tech Mahindra lay off news left IT employees in panic mode

Job crisis plagues IT sector – The Urban Debate (May 30)

IT Layoff 2017 India

The Big Picture- Layoffs in IT firms: reasons and gravity

Donald Trump Effect - Be Careful About Your IT Career

IT jobs no longer secure - 30 Minutes - TV9

Bloomberg on Trump's impact on Indian IT industry.

IT Employees Seeks Action Against Cognizant For Massive Layoffs In Chennai

Protest against layoff of TCS employees (22-01-2015)

Sudha Thiagu speaks about TCS Layoff issue

TCS Mass Firing - Chennai Court says No to the Firing - First victim Got a first victory

Madras High Court Say No to firing in TCS - Victims Hope other Courts & Govt will be with them

The bottom line simply is that IT skills acquired in college or university mostly do not remain relevant and marketable throughout one's working life, unlike more traditional trades such as plumbing, carpentry, welding and so forth, and traditional professions such as medicine, dentistry, law, architecture, engineering, botany, zoology, agriculture, chemistry and so forth.

With the rapidly evolving nature of computing and information technology and its rapid rate of obsolescence, the skills of IT workers become similarly obsolete just as fast, forcing IT workers to constantly keep themselves updated with the latest IT skills, like hamsters running on a treadmill, faster and faster just to stay in the same place, and quite frankly few can keep up with the pace, given the responsibilities of married and family life as they grow older.

Whilst all the above is happening in India's IT industry, one wonders what the future bodes for Malaysian IT and BPO workers.

In 2015, I met a Malaysian who used to head his own company which operated a data centre. He told me that his company was no more as the data centre business is too fiercely competitive and he now works for a foreign-owned data centre operator.

Data centres are purpose built facilities, usually a purpose built building which houses servers - i.e. computers which host websites, e-commerce sites, cloud-based applications hosts and so forth, in temperature and humidity controlled environments, often served by redundant electricity supply, redundant data connections and adequate standby power generation capacity to guarantee up to 99.995% or more availability.

Data centres was the sexy industry in Malaysia to be in back around 2012 and 2013 and probably still is to an extent today, but the latest sexy industry to be in today are Big Data and Internet of Things (IoT) but I wonder for how long, before the next "gee whiz" industry comes along.

Meanwhile, property development seems to have taken off in Cyberjaya, with tall buildings sprouting all over the place, just like in the major cities and towns of Malaysia.

When Cyberjaya, the heart of Malaysia's IT and multimedia industry was originally conceived and built freshly form the ground up in the mid-1990s, it was supposed to comprise only of low density development, with low rise buildings of not more than four storeys high, with much greenery between them, supposedly to provide a calming and soothing ambience for thinking and creative minds to flourish but that's no longer the case, as Cyberjaya gradually transforms into a concrete jungle, like the cities and major towns in the rest of Malaysia.

Yours trully

IT.SCHEISS



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