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Falling scrip, dent in revenues, sinking market cap… the effect of the global economic meltdown seems to be disturbing for the Indian IT companies. Almost all of them have already resorted to a number of cost-cutting measures.
The tough time is forcing them to find ways to trim costs and do more with less. Here’s looking into what all your company is doing to beat the blues of slowdown.
Pink slips
This one seems to be the preferred choice among employers. With global economy in doldrums, all major IT players have handed out pink slips to employees to cut costs. Be it Indian biggies like Wipro, Satyam or TCS, or the world majors like Nokia, Motorola or British Telecom, all have downsized their workforce as a belt-tightening measure.
Though some of the Indian companies initially termed it as a performance-based initiative to weed out non-performers, the inside story is that many companies have adopted this measure to beat the challenging market environment.
Hiring freeze
Almost all major Indian IT firms have introduced a country-wide hiring freeze.
Recently, networking giant Cisco Systems reported that it has frozen the hiring process and is adopting a ‘wait and watch’ approach due to the global slowdown, besides cutting costs up to $ 2 billion through various means.
In a briefing, the apex IT industry body Nasscom, said the Indian IT industry will retain employees, but will go slow on hiring this fiscal (2008-09) following the declining growth rate.
According to Nasscom president Som Mittal, there are no job cuts, but hiring will be less in this fiscal compared to previous years as IT firms are cautious about their business prospects in the short and medium term due to global recession and financial meltdown.
Campus recruitments
If you thought registering with a placement consultant will still land you a plush IT job, think again. Many IT companies are going in for campus hirings rather than recruiting through job consultants.
Recently, Wipro Talent Acquisition VP Pradeep Bahirwani said that the company has started campus hiring in US and UK. The company said that it had made 8,000 campus offers this fiscal.
Also, Satyam which plans to hire 14,000-15,000 people in this fiscal, is going in for campus recruitments.
In a recent mail to its employees, SAP wrote that all third-party expenses should be stopped. The mail read, “Since we are not hiring, all engagement with external recruiters must cease immediately. We will discontinue engagement with management consultants and evaluate the impact this has on ongoing projects. Until further notice, all external training is to be cancelled. Internal meetings must be held within SAP buildings, and you cannot rent external conference facilities for this purpose.”
Extend holidays/compulsory leaves
Never thought you would be sent on a compulsory leave, did you? The slowdown has led many companies to extend holidays for their non-essential employees, or have sent them on ‘forced’ leave to cut their expenditure.
In fact, Hewlett-Packard Co, Apple Inc, and Adobe Systems Inc, three of Silicon Valley’s best-known technology companies, recently decided that they will shut down during the December holidays to save on operating costs.
Earlier, German software company SAP was the first one to report that it will send employees on leave between Christmas and New Year as part of a cost-saving programme.
No AC cabs
The days of a luxury drive to office in an AC cab are over, at least for now. This again is one measure that most IT companies took right at the beginning of the economic turmoil.
Sometime back, TCS employees were reportedly shifted from an AC cab to the non-AC ones as a measure to restrict company costs. Not only this, the company clubbed the routes connecting various parts of the city to bring down travel costs.
Not only TCS, its other rivals including Wipro, Satyam and HCL too have reportedly gone in for similar measures in a bid to bring down transportation expenses.
Cut in travel expenses
Never thought you would be asked to travel in economy class on your business trip? But recession leaves companies with fewer choices. The current turbulent times have forced many companies to restrict their extravagant travel allowances.
Companies are trimming travel and entertainment budgets in a bid to cut down costs. Not only this, IT companies are also actively hunting for cost-competitive travel deals, monitoring travel bonus points and going in for day trips rather than overnight stays to cut down expenditure. No wonder airlines are seeing a sharp drop in business travelers.
Many companies have sent out mail to their employees, asking then to restrict their travel plans, or banning them outright.
German-based software company SAP recently sent out a mail to its employees which reads “Cease all internal non-customer-facing travel in October…Any non-customer-facing travel already booked should be canceled immediately, even if this incurs penalties.” SAP sales people will also have to fly economy class from now on unless they use their accumulated miles to upgrade.
Not to be left behind, networking giant Cisco plans to cut costs up to $2 billion through measures like slashing travel costs.
No celebrations
The global economic turmoil has almost put an end to celebrations all around the world this year. Many companies scaled back their Diwali celebrations, reducing the amount of bonus and gifts given to employees.
And with Christmas and the New Year round the corner, many companies have expressed their plans to curtail their celebration budgets.
Recently, a few reports suggested that the Web search giant Google Inc, which is known to host the most extravagant holiday parties in Silicon Valley often drawing crowds of over 10,000, has decided to scale back its holiday celebrations this year.
The company is also ’significantly’ reducing the number of contract workers it uses, but has no plans at this time to lay off employees.
Cut in stationary expenditure
If your boss is asking you to cut down your stationary expenditure, don’t be surprised. This measure too is being followed by most companies in an attempt to bring down the costs. The HR and admin departments of most companies are strictly keeping a tab on the stationary requirements of their employees.
Not only this, many such overhead expenses are being strictly monitored and any discrepancy found is being reported.
Cut in food allowance
Country’s sunshine industry known for pampering its employees with free food and drinks on the house has almost stopped giving free food coupons. No wonder the recession has hit the kitchen budgets too.
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