Fear of recession rerun to hit Indian IT companies
High demand for technology skills had been a standard for more than two decades now, barring the 2007 recession. However it seems, the recession is too stubborn to get over. We can see signs of large economies creaking and still limping with the wounds of recent recession.
It is almost clear that the recent US financial issue is going to take toll on not only the US jobs but on Indian jobs as well. IT sector will be hit because IT budgets are being slashed. The challenge to maintain the high cost resources would be a real issue for Indian IT companies if the cost is not justified.
“ Higher salaries coupled with high inflation have already put stress on viability of companies who depend completely on US market “
An Indian government doctor gets paid INR 400,000 per annum after fifteen years of job. This money is earned by IT engineer in the second year of his job. An engineer with armed forces would earn about INR 700,000 after fifteen years with good performance which is easy to get money after four years of job in IT sector. They get paid less just because they service India and Indian customers.
IT Industry on the other hand had to pay very high salaries because the customers were overseas and could afford high payouts. Higher salaries coupled with high inflation have already put stress on viability of companies who depend completely on US market. Next one year will decide if India also has to adopt pink slips the way US companies do. We hope, the day never comes.
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