An industry expert, who sees no merit in reports about massive layoffs, said on Monday that the opportunities for new recruitment and promotions have shrunk in India’s IT industry, a phenomenon natural when growth slows down.
The growth rate has definitely slowed down because of which opportunities in the industry, especially for new recruitment, is down, Infosys co-founder Kris Gopalakrishnan said.
“Because, when the growth rate comes down, there is less need of new people. Second, the opportunities for promotion are also less because you don’t need more people.
“You don’t need people at the higher level because there is no upward movement,” the former CEO of the Bengaluru-headquartered IT major told PTI in an interview.
“I haven’t seen or heard anything about massive layoffs. There is always tightening of promotion process and I think that will happen automatically,” he said.
“Promotions are going to be tighter. (Performance) evaluations are going to be more tougher,” said the Chairman of Axilor Ventures, an early stage startup accelerator and venture fund.
But Gopalakrishnan said such developments are natural in the sector as they have happened in the past—after the internet bubble burst in 2001 and the 2008 financial crisis.
There are multiple factors affecting the IT industry now—growth slowing down because economies in which Indian companies operate—the US, Europe—are slowing down and, secondly, because of the “base effect” as the industry is very large now, and also because of uncertainty on the Visa front.
Asked about some reports on efforts to prop up a union in the IT industry, he said he firmly believes that employees in the sector are “well paid, very well taken care off, (and) they already have choices (to change jobs).”
“For me, forming a union (in the IT industry) is a bad idea. Union may make sense when you are working in a factory. This (IT industry) is not that, people have choices, (they are) very well paid,” the former president of Confederation of Indian Industry (CII) said.
On Infosys co-founder N R Narayana Murthy’s statement that IT companies can protect the jobs of youngsters if senior executives take pay cuts, Gopalakrishnan said, “I don’t see massive layoffs or anything like that. So, I don’t want to comment on that.”
Regarding job opportunities in the IT sector, he said, “There is still requirement for people with major sciences, (skills in) artificial intelligence, new paradigms on the mobile platform, on IoT: this is an industry that’s always looking for talent with right technical capability.”
On if he expects “protectionist tendencies” to persist in the US and Europe, two key markets of Indian IT companies, Gopalakrishnan said, “I believe it’s part of the cycle because all economies are growing, without creating new jobs. There is a tendency to protect jobs.”
“Having said that, if you see data from the US, there are 600,000 unfilled jobs in IT sector. People with right skills will get recruited,” he said.
“I also believe that companies (in the US) are finding it difficult to recruit right people and they will come to India and set up operations by themselves. So, the IT back-offices will continue to move to India, whether in an outsourced model and direct model,” he added.