BackTech firms start to pull back on hires
Tech firms start to pull back on hires
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Bangalore: Pooja Shetty, 21, got a job offer from MindTree Ltd in December, some six months before she was to complete her engineering degree from the National Institute of Engineering in Mysore. An engineering graduate now, Shetty has been told by the software services and consulting firm that she can join in April.
Shetty is among hundreds of engineering graduates who got campus offers last year and early this year, but are being asked to defer joining dates.
For the first time since the dot-com bubble burst in 2001, deferments, and in some cases rescinded job offers, are being seen across engineering colleges, be it at the premier Indian Institutes of Technologies (IITs) or in smaller colleges, a fallout of a tech slowdown./Content/Videos/2008-07-11/Poornima on IT hiring.flvfee57022-4e8d-11dd-ab00-000b5dabf636.flv
San Jose, California-headquartered Magma Design Automation Inc., a developer of software for semiconductors and electronic products, revoked a handful of offer letters given to postgraduates from IIT Kharagpur due to the slump in market conditions.
Anand Anandkumar, managing director of Magma Design Automation India, the company’s local unit, admitted this in an email. “This year, after making the offers, the overall economic landscape of our industry changed and Magma’s overall strategic direction underwent some change as well. This led to a change in our requirements," he said.
“Although we continue to have a steady need for people with relatively little experience, our people mix is currently a bit too heavy on this end—and too light on the more experienced end...we have deferred bringing on India campus hires until April 2009," says Sandeep Dhar, managing director of Sapient Corp.’s India operations.
While it is not as dire as 2001, both entry-level hiring and other hiring are slowing, say those in the know.
“Two IT companies have deferred joining dates by three-four months. So, instead of joining in August 2008, students will join these companies in December. But, the situation is not as bad as 2001 when companies were deferring joining dates by one year," said K.S. Sridhar, dean, training and placements, at Bangalore’s PES Institute of Technology. Some 35 students of a batch of 500 at PES are facing deferment, he said but did not name the firms involved.
Even much sought-after IIT students are being asked to wait. Suneel Kumar finished his masters in technology from the IIT Kharagpur in June but has been asked to join Bangalore-based Sasken Communications Technologies Ltd only on 1 December.
“I’m disappointed, but what to do," he says. Kumar will stay on at the IIT and work on a research project until then.
Hari Iyer, senior vice-president of human resources at Sasken, says “the joining dates are staggered to enable us to impart proper training".
“Joining dates for engineering graduates are being delayed from anywhere between three and nine months," says Rishi Das, director of CareerNet Consulting Pvt. Ltd, a recruiter. Gautam Sinha, chief executive of TVA Infotech, another recruiter, says lateral hiring (that of people with experience) has also slumped 30%.
The Indian IT/ITeS (information technology/information technology-enabled services) industry is estimated to have made about 125,000 lateral hirings and about 120,000 campus hirings in 2006-07. According to the National Association of Software and Service Companies, or Nasscom, the Indian IT and related services sector employs about 2 million people as of March. As per the Nasscom-Mckinsey Report 2005 (the latest available), the headcount is projected to touch 2.3 million by 2010.
Mint asked a slew of large technology companies on whether they were deferring joining dates for campus hires.
An Infosys Technologies Ltd spokesperson said the company is “not making any changes in our hiring plans". A Wipro Technologies spokeswoman said she can’t discuss the issue claiming it would violate what is normally known as the silent period prior to releasing its results, due on 18 July.
Meanwhile, International Business Machines Corp.’s (IBM) India arm was said to have conducted a second round of tests for students whom it had already made job offers to. “We cannot comment on specifics... In alignment with IBM’s standards for cultivating a high-performance culture, we have instituted mandatory communication and aptitude tests to ensure that the students still meet our criteria for providing high levels of services to our clients," said an IBM India spokesperson.
A placement official at the National Institute of Technology Karnataka, who did not want to be named, says, “Typically companies communicate joining dates by April but this year companies like Cognizant have said they are still processing their papers."
T. Sridhar, chief people officer at Cognizant Technology Solutions Corp., denied there have been any deferments. Cognizant inducts freshers in June-July for training and this year is no different, he said.
Meanwhile, Shetty, the MindTree employee-in-waiting, is sitting at home in Udupi, taking various evaluation exams used by recruiters. She has let her friends know she is open to job offers rather than wait nine months to join MindTree.
Shetty was among the 18 from her batch who got offers from MindTree. They had been divided into four groups and she was in the group that was slated to join last.
MindTree says the delay is part of its recruitment strategy.
“We enroll engineering graduates in a phased manner," says Manoj Chandran, director marketing.
“Last year, they joined us in two batches—in July and October. This year, too, we have plans of enrolling them in multiple batches and the same has been communicated to them."
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