No meltdown job cuts, assure Tata Consultancy, Infosys

Two of India's top information technology (IT) majors Tata Consultancy Services and Infosys Technologies Ltd have assured the Karnataka government that they will not retrench any of their employees in the wake of the global financial crisis, a top state government official said Thursday.

TCS and Infosys have clarified that they would not lay off any of their employees and their future recruitments would continue, Ashok Kumar C Manoli, principal secretary for information technology, biotechnology and science and technology of the Karnataka state government told reporters here Thursday.

The impact of the financial crisis on the IT sector was not alarming but the state government was keeping a close watch on the situation, he said.

Karnataka generates 36 percent of India's IT revenue.

"As far as the past six months were concerned, the growth rate in the IT industry remained stagnant at 28 percent but we will be able to get a clearer picture by the end of the year," Manoli said.

According to figures available with Software Technology Parks of India (STPI), Karnataka, the state registered Rs.150 billion IT exports in the first two quarters of 2008 as against Rs.130 billion the previous year.

"If we see the figures, the trend is positive. But yes, the global recession will have some effect on IT and business process outsourcing (BPO) companies. But the figures are yet to come out. So we are waiting and watching the situation carefully," said R Rajalakshmi, director of STPI, Karnataka.

"Urgent measures need to be taken by the industry itself, including cost cutting. The annual IT conclave starting here Nov 6 will deliberate on the strength and weaknesses of the industry and models to redesign its entire working," said Manoli.

Manoli along with Karnataka IT and BT minister Katta Subramanya Naidu were talking to the media on the 11th edition of 'Bangalore IT.Biz', an annual event.

The conclave will bring together IT industry leaders to discuss the impact of the financial crisis on the IT sector and what steps need to be taken to tackle the situation.

"Top IT companies from around the globe will be participating in the meeting. This is an ideal time for companies, policy makers and industry bodies to introspect and find out a solution to overcome the economic slowdown. And, more importantly set strategies for the future," Manoli said.

Source: EconomicTimes