‘IT jobs are in jeopardy’

“We’ll get back to you.”

“We’ll let you know soon.”

Such faux promises are beeping out with increasing frequency to engineering graduates who were offered jobs by information technology companies over a year and a half ago.

That’s diplomatese — for telling the hiress to forget about the offers and start looking for other jobs, consultants say.

T. Muralidharan, chairman and managing director of Hyderabad-based talent management and talent acquisition company TMI group, says officially, no company can revoke an offer it made as its reputation will be marred. “The policy of companies is not to revoke offers, but postpone them indefinitely,” he adds.

Indefinite postponement of joining dates means the prospective employee won’t be taken this year at least. Recession last year, coupled with investment banks going bust, has hurt the business of IT firms as these banks form a major chunk of their clientele. This has led to an unofficial freeze on taking new people on the rolls.

Take 23-year-old Rashmi Shah, an engineering graduate from a Bangalore institute. She told DNA Money that in 2007, she received an offer from a top-ranking IT company in the country. Her joining date, which was sometime in June this year, was extended indefinitely.

“It’s October, and there’s no news from them. Whenever I call the company, the only thing I hear is ‘we’ll get back to you’. Initially I believed them, but now I know nothing will come out of this offer,” rues Shah.

She’s now planning to go in for a masters of computer application (MCA), and simultaneously look for jobs “elsewhere”, “maybe BPOs or the manufacturing sector”.

IT firms such as TCS and Infosys have said that this year, they would hire 30,000 and 25,000 people, respectively. Others like Wipro will hire about 15,000.

But these figures suggest only the number of offers that will go out and not necessarily the number of those who will start working with the companies this year, say HR consultants.

In 2007, these very companies had said that they would be hiring upwards of 30,000. For offers made in 2007, joining dates were to be in June 2008.

But the offer letters are collecting dust as postponements abound. “Some of my batchmates and I have accepted that nothing would come out of the offers that were made last year by this Bangalore-based software company. So, some of us are planning to go in for further studies while the rest are hunting for sales and marketing jobs,” says an engineering graduate from Dr Ambedkar Institute of Technology in Bangalore.

Experts say that of the nearly 1,00,000 offers that were made by big and small IT firms last year, only about 10,000 people have actually started work till now. “Jobs in IT are in jeopardy,” says Kris Lakshmikanth, founder chief executive officer and managing director of HR consultancy HeadHunters India.

TMI’s Muralidharan adds that indefinite delay in joining is unfair, as the remuneration loses meaning with time. “Offers were made to engineering students in 2007 and they were to join in June 2008. But 2008 is nearing end and there are no signs of joining dates. Some companies mention the salary in offer letters. How can a remuneration decided in 2007 hold importance nearly two years later?” he asks.

1,59,000 jobs lost in US in a month

As many as 1,59,000 jobs were cut in the US in September, the worst ever retrenchment in a month for five years, the government has reported, heightening fears that the economic downturn was worsening and could persist well into next year.

The job loss has continued for nine consecutive months totalling 7,60,000 in the period, according to the Labor Department's report released Friday. In the last couple of weeks many people also had to leave work as several Wall Street institutions collapsed.

"We've lost jobs in nearly every area of the economy, and this is going to get worse before it gets better because the credit markets have deteriorated basically on a daily basis for the last few weeks," Michael T. Darda, chief economist at MKM Partners, a research and trading firm in Connecticut, was quoted as saying by the New York Times.

Though the financial bailout plan cleared by Congress and signed into law by President George W. Bush Friday may restore order in the financial system, it will take time for its effect to be felt.

In a chain reaction, housing prices continue to fall, eroding household wealth just as millions are trapped in unmanageable debt. The shrinking job market has taken many paychecks out of the economy, forcing people to rethink thrift, resulting in reduced sales from car showrooms to hair salons.

Till only a few weeks ago, many economists held hopes of the economy recovering late this year or early next year. But now with the job market contracting faster, and fear dogging the financial system, 2008 is seen as a lost cause.

The more pessimistic analysts don't mind using the word 'recession'.

"This is an economy in recession, and every dimension of the (labour) report confirms that," said Ethan S. Harris, an economist at Barclays Capital. "This has been preceded by a slow-motion recession. Now we're going into the full-speed recession that will last somewhere between three and five quarters."

Britain to cut 10,000 public sector jobs

Britain is set to cut nearly 10,000 jobs from its Ministry of Justice (MoJ) as part of a round of budget cuts to battle the tough economic climate, The Times newspaper said on Wednesday.

But a spokeswoman for the Ministry said although the division was making nearly 1 billion pounds ($1.75 billion) worth of cuts, no decision had been made on jobs and that only back office and support departments were likely to be affected.

She added that the Ministry had been created from a combination of other government divisions around 18 months ago, producing a duplication of resources.

"There is some duplication in back office and support services that we do need to streamline, but no decision has been made on any job cuts," the spokeswoman told Reuters.

"Under the agreement reached in the last Comprehensive Spending Review, it has long been the case that the Ministry of Justice is seeking efficiency in savings over the next three years. This was set out in our annual report published some months ago," she added.

The Times report said the Government planned to make 900 million pounds ($1.58 billion) of savings at the department. Ten thousand job losses would represent around a tenth of the division's workforce, it added.

The newspaper said the budget cuts could lead to the closure of some 100 courts in Britain, but the MoJ spokeswoman said no "frontline services" such as courts would be affected.

"I do not recognise that," she said.

Yahoo to announce more job cuts next week

Yahoo is expected to announce more job cuts when it would present its third-quarter earnings next week, officials said.

The Internet portal giant is likely to lay off at least as many employees as it did in January, when it sacked 1,000 workers, people familiar with the industry said Saturday. Yahoo currently has around 14,300 employees.

Leading online auction and shopping website eBay announced earlier this month to lay off 10 percent of its 16,000 workers, while search engine giant Google reportedly has been quietly trimming its contractor workforce.

Google has a total workforce of around 30,000 people, including around 10,000 contractors. However the company declined to disclose how many contractors it has let go.

Industry analysts said that the Internet companies, which typically have large overhead and staff numbers, are bracing themselves for a tough economic situation in fears of a global recession.

Global slowdown threatens millions of jobs in China

Up to 2.5 million people could lose their jobs in the Pearl River delta, covering Hong Kong and parts of southern China, by January as a result of the global economic slowdown, a media report said Sunday.

The financial crisis could also bankrupt one-fourth of Hong Kong-owned small and medium-sized enterprises in the next three months, said the South China Morning Post quoting local business group, the Federation of Hong Kong Industries.

"The flow-on effects in Hong Kong will be drastic. It will hit the banks, the service industries, everyone," said federation chairman Clement Chen.

"We are very, very worried about our businesses. Our feeling for the medium term is grave and we believe the recession is going to last for some time," Chen added.

Chen said banks were cutting overdrafts and other credit facilities which meant companies found it difficult to pay suppliers and staff as exports fell.

"We are appealing to the banks not to take the same line with everyone and to examine each business on an individual basis," Chen said.

Several companies have recently said they would close down.

About 1,500 staff of Hong Kong-listed electrical appliance maker BEP International in Shenzhen, which borders Hong Kong, will lose their jobs Monday (tomorrow) when their factory closes.

Friday, Hong Kong's third-biggest appliance store chain, Tai Lin Radio Services, shut with the loss of 260 jobs, barely a week after U-Right International Holdings, a garment maker and retailer, went into liquidation throwing hundreds out of work.

Some 6,500 staff of Hong Kong-listed toymaker Smart Union were also left unemployed when the company went into liquidation last week.

The Hong Kong government said Saturday that it would give more financial support for small and medium-sized firms. That includes a loan guarantee package that can be used for operating expenses in addition to capital expenditure.

Job seekers may have to settle for lower pay

A few weeks back, when six top executives of a troubled American bank’s Indian arm started negotiating for jobs with a domestic financial services firm, it appeared life had come full circle for them. The much sought-after talent were suddenly hard pressed to justify their current salaries, let alone seek a hike. The domestic firm offered 50-70 % lower paychecks and the executives accepted.

Corporates—who were used to paying whatever was being asked for by top talent and stay ahead of the attrition curve in a boom economyare now taking control of the job market. As growth slows down, it’s a buyers’ market out there and employers are calling the shots once again.

Settling for lower salaries in new jobs is not limited to the beleaguered financial services sector alone. Even as airlines mull salary cuts and layoffs, there are several high-fliers in other sectors who are settling in new jobs at much lower salaries after having been eased out of their previous position. “Employers are increasingly becoming reluctant to continue offering huge salaries to executives . Talent is required but at a suitable price. Not only that, companies across sectors are rationalising their manpower strengths,” says Head Hunters India CEO Kris Lakshmikanth.

A 40-something executive director, who earned around Rs 1.2 crore per annum at a leading FMCG firm, recently faced a similar dilemma. When the company asked him to put in his papers, he was forced to take a 30% salary cut in his new job with a pharma company.

In another instance, a Delhi-based real estate firm, conscious of increasing costs, recently cut short the dream run of another high-flier . The executive, in his early 30s, headed the sales team at the realty major and earned Rs 7 lakh per month. Having been shown the door, he went back to his employer and settled for an 80% salary cut. “The variable part of the salary has taken a huge hit. Companies are not guaranteeing any bonuses or other incentives in the coming year,” says Transearch International managing partner Uday Chawla.

What’s more, with the recession in key markets like the US and UK, global talent—both expat and diaspora—are now available to Indian companies at bargain basement prices. As a result, home-grown execs are finding the market more crowded than before. A senior vice-president , who recently quit a mid-sized IT firm, is struggling to get a decent offer. The best offer he has managed so far will get him 40% less than his previous salary.

Even those lower down the corporate ladder and still on the rolls are feeling the heat. A programme manager at a global IT firm, who received a hefty salary and 200% bonus last year, got a 20% pay cut this time. And there’s simply no assurance of a bonus.

No job cuts in Air India: Praful Patel

Civil aviation minister Praful Patel on Monday ruled out retrenchment among employees in public sector Air India and blamed rising fuel prices as the reason behind the present crisis in the aviation sector.

"I have categorically denied that there will be any retrenchment in Air India," he told reporters here after the inauguration of the Rs 1808-crore Chennai airport expansion and modernisation project. He, however, declined to comment on the issue in the private sector.

Jet Airways had last week decided to lay off about 1900 of its employees but withdrew the move promptly.

Kingfisher Airlines has announced a salary cut of its trainee pilots as part of cost-cutting measures.

Patel said prices of Aviation Turbine Fuel (ATF) have gone out of control and called for "rationalisation" of the same to manage the present crisis.

The rising prices have put an extra burden of Rs 7,000 to Rs 8,000 crore on the airlines operators who have in turn passed on the burden to passengers, he said and stressed the need for states to reduce the sales tax levied on ATF.

"Most states levy a sales tax of 29 per cent on a commodity whose value has gone up, which also adds up to the overall cost," he said.

He also demanded a cut in other taxes, including customs and excise. "States should understand that better rational pricing brings more flights into their cities, helping in increased revenue...I hope all understand," he said.

He also said that unless a permanent solution was found, fears of retrenchment "will hang in the air."

Kingfisher Airlines halts pilot hiring

Hyderabad: Kingfisher Airlines has put an end to its pilot recruitments for now, and has opted not to honour the 'letters of intent' it had issued to its co-pilots earlier this year.

Reports quoted unnamed sources while saying that the airline had issued letters of intent to young pilots promising them jobs as co-pilots once they completed their Type Rating training from institutes abroad. They reports say that a number of these trainee pilots have since then completed their training programmes successfully and have even received their Indian licences, but have not heard from Kingfisher Airlines.

Reports quoted sources as saying that the trainee pilots had been informed that Kingfisher Airlines does not need crew and that the communication was given to the students as and when they completed course and thereafter contacted the airline for the job promised to them earlier.

These young pilots now face a brutal financial loss at the very start of their careers, since the training programme costs lakhs of rupees, which most of them had hoped to earn back while flying for Kingfisher Airlines, as per the promise. 

Reports quoted one young pilot who had been issued this letter in April as saying that the letter was clear about the fact that he had to bear the course fee at the institute recognized by the airline. He says that since the job at Kingfisher was promised in the letter of intent, he paid around Rs35 lakh for the training programme, but was in for a rude shock when he returned and contacted the airline. The airline asked him to wait for them to contact him, which he says as not happened so far. 

Reports cited an unnamed Kingfisher spokesperson  as being unable to comment on the matter, and instead repeating the airline's statement prior to the weekend which spoke of salary cuts and the turbulence in the aviation industry that have mandated a reduction in capacity.

The letters of intent issues by Kingfisher Airlines say that it would absorb graduates of the training programme once the foreign flight licence is converted into an Indian one, and the trainee pilot is found to be 'skilled enough'. Trainee pilots now say that the phrase ''skilled enough'' could be leveraged against them, as it is subjective and open to interpretation.

Financial crisis to cost 20 million jobs, says UN agency

Twenty million jobs will disappear by the end of next year as a result of the impact of the financial crisis on the global economy, a United Nations agency said on Monday.

Construction, real estate, financial services, and the auto sector are most likely to be hit, according to the International Labour Organisation's (ILO) estimate, which is based on International Monetary Fund projections for the world economy.

The toll on jobs could be even higher if IMF economic projections are cut, said ILO Director-General Juan Somavia.

"We have to talk about the financial crisis in terms of what happens to people and what happens to jobs and enterprises," he told reporters.

Somavia said the ILO, which brings together governments, employers and workers, wanted to steer discussions about the resolving the crisis toward job creation and other steps to promote the "real economy".

"It would be tragic to respond to a sub-prime crisis with sub-prime policies," he said.

The ILO does not yet have a regional breakdown of projected job losses, which Somavia said would take global unemployment to 210 million in late 2009 from 190 million last year, the first time it has topped 200 million. But countries with large domestic markets that do not depend heavily on exports would be able to weather the crisis better, he said, citing as an example China, where exports make up only 11 per cent of the economy.

It was alarming that global unemployment had stayed at the same levels despite the strong economic growth seen between 2002 and 2007, said Somavia, who files to New York this week for talks with the heads of all UN agencies, chaired by UN Secretary-General Ban Ki-moon.

He said resources should be pumped into the economy to stave off or mitigate recession, concentrating on employment-intensive sectors including small enterprises.

The financial sector should also be steered back to its fundamental function of lending to entrepreneurs, according to the Chilean lawyer and diplomat. Somavia said the financial sector's share in the profits of US companies had risen to 41 per cent last year from 5 per cent in 1980.

As a result, banks preferred to invest in financial transactions rather than lending to other productive sectors. "So this system began to siphon off resources from the real economy process," he said.

And listed non-financial companies came under pressure to match the returns of the financial sector, forcing them to cut costs – often by freezing salaries or laying off staff – rather than making long-term investments.

"From one point of this view this is called productivity increases. From a more profound point of view it means a worker becomes a commodity," he said

Now, retail industry feels layoff heat as growth turns tepid

Shekhar Mehra, a 39-year-old deputy manager with Vishal Retail was shocked when his company asked him to resign with immediate effect.

“About 400 people have been asked to resign. When I asked my HR head to assign even one genuine reason for this (the request for a resignation), he was speechless,” said Sharma, who looked into procurement and merchandising of food products for Vishal and earned an annual package of Rs 4 lakh.

However, Manmohan Agarwal, CEO, corporate affairs, Vishal Retail told Hindustan Times that the company has not done anything radically different than what was the practice for years together. “For six months, we have people on probation. Also, for some management cadres, we don’t have any provision of notice period. We adhere to all terms and conditions of the contract we enter into with all our people,” he said. The company has 14,000 employees and Agarwal said that 300 to 400 people leaving every month is a common thing.

As India feels the ripple of a global financial meltdown, sectors, such as retail, which were so far not only fast-growth ones but also hot employers, have developed cold feet. If they aren’t laying-off people, they have almost frozen new recruitments.

“Talent will always remain a function of growth and with companies getting a little cautious now, layoffs are imminent especially in sectors who, in the wake of significant and fast growth of the last few years had gone overboard on hiring,” said Raj Bowen, managing director (India), Personnel Decision International, an HR consultancy firm.

“Six to seven months back many retailers were bullish on the entry of foreign players, which have now been deferred due to the slowdown. This coupled with protests from smaller retailers as well as political protests have hit them big. Many retailers have also seen their stock falling and this has led them to take certain tough measures,” said E. Balaji, CEO at human resource consulting firm Ma Foi.

Though there is no official confirmation, some media reports say Reliance Retail has laid off more than 2,000 people.  “We would categorically deny reports of retrenchment of staff undertaken by Reliance Retail,” said a Reliance spokesperson.

Sanjay Jog, chief people officer, Future Group said his company is continuing business as usual. “We recruit about 500-600 people every month and currently, there is no change. In case there is a delay in completion of properties due to the US slump, it may affect the industry.” The company has 30,000 employees.

Tata lays off 200 Jaguar Land Rover staff

The car maker, which is owned by India's Tata Motors, is to make around 200 employees redundant at its plants in Birmingham, Solihull and on Merseyside.

Jaguar Land Rover employees 15,000 people in Britain, and said that it would seek to shed the staff through voluntary redundancies.

The credit crisis has seen new car sales in the UK tumble by more than a fifth compared to this time last year, but Jaguar insisted that its job losses were unrelated to the current economic gloom.

A spokesman for the car maker said that it was part of an "on going drive to improve efficiency", and said similar cuts had been made in previous years.

"It is a small redundancy programme and it affects 198 staff across all our manufacturing sites," he said.

Jaguar Land Rover has announced a range of measures in recent weeks in an effort to limit over-production, including four-day weeks and temporary closures of some plants.

Official figures released this week showed that the total number of unemployed people in the UK has risen to 1.79 million, the highest since March 1998. Some analysts have predicted that 2 million people could be out of work by Christmas, with the jobless total expected to pass 2.5 million next year.

The Office for National Statistic figures also showed that a total of 147,000 people were made redundant in the three months to August.

The Government has made available an extra £100 million for re-training workers, in anticipation that the likely imminent recession will see a jump in job losses.

Glass-maker Waterford Crystal announced that 280 staff at its plant in Waterford in the Republic of Ireland are to be made redundant.

No lay-offs in Kingfisher this year: Mallya

Amidst his new ally Naresh Goel announcing 1900 lay-offs from Jet Airways to cut costs, business tycoon Vijay Mallya on Wednesday night said there would be no pink slips given to Kingfisher employees.

“As of now, Kingfisher has decided against any job cuts,” Mallya told reporters. There were speculations that atleast 300 jobs would be axed from the company roster.

To Kingfisher Vice Chairman and former chief of Air Deccan Captain GR Gopinath’s veiled offer of buy-back the merged Deccan, Mallya said the airlines was not on sale. Gopinath started the concept of low cost carrier with Air Deccan but in May 2007 Kingfisher's Mallya bought 26% stake in Deccan for Rs 550 crore. He had said he would buy the airlines if the owners could not run it in low cost.

Mallya said that Kingfisher did not have surplus staff to retrench, but would review the situation next year. “If there are flight cuts next year, the situation could change,” he said. He added they were ‘an over-taxed industry’.

Naresh Goyal apologises

Jet Airways chief Naresh Goyal Thursday night apologised for sacking a large number of employees, mainly cabin crew, and assured them that their jobs were intact and they could report to work from Friday.

‘I have not been able to sleep all night. I apologise for what has happened,’ Goyal told reporters at a late night press meet.

‘I request all of you to start work from tomorrow morning. We will stand by our employees,’ he said.

Jet had sacked around 1,000 employees after its mega alliance with Kingfisher Airlines and had said it could dismisss another 1,000 in a cost-cutting move.

The move had led to a massive outcry.

JET AIRWAYS TAKES SACKED EMPLOYEES BACK

Reversing its decision to sack 1900 employees to ‘save the company’, Jet Airways owner Naresh Goyal on Thursday night announced that the company was ready to take back all the employees. “I request all the employees to join from tomorrow. I am sure we will work a way out to put finances on track,” he told media persons in Mumbai.

“I was away from the city for two days. I reached today and was disturbed to see the visuals of our young employees crying. The employees are like a family to me- as I have maintained from day 1- and I can not see them in difficulty. All of the employees sacked are back,” an emotionally surcharged Goyal said.

AI may lay off 15,000; Jet blasted

Never before has India's aviation industry seen such turbulent times. Lack of passenger demand, high aviation turbine fuel costs, rising airport and other charges, possible consolidation, huge losses, and now employee sackings.

Meanwhile the industry grapples with the challenges at hand and wants the government to bail it out with a package of about Rs 4,700 crore (Rs 47 billion). However, what most people are asking is why should private companies be bailed out by the government, especially when they are firing their staff.

Patel 'sorry' for sacked Jet staff

Sympathising with the sacked Jet Airways employees, Civil Aviation Minister Praful Patel on Thursday said he would hold talks with all airlines to find a way out of the downturn in the industry caused by high fuel costs and economic slowdown.

"I sympathize with those young boys and girls who lost their jobs. I will talk to all airlines to see that such large scale loss of jobs does not happen and try to find a way out," he said in Hyderabad.

"At a personal level and also at the government level, I will tell the airline to accommodate as many people as possible," he said in a reply to question of Jet decision to sack 1,900 employees on Wednesday.

Meltdown: Thousands of jobs to go globally!

Thousands will lose their jobs in the global financial sector as many companies have witnessed the fastest drop in business levels, profitability and confidence in almost two decades.

Initial estimates say that the unprecedented crisis in the global financial services industry will lead to more than 250,000 jobs being lost globally.

And economists say that this figure is 'very conservative.' The eventual number of jobs that will actually be lost could be much higher, they say.

The fiscal hurricane that originated in the United States has soon spread panic and gloom across the world markets. European companies have already announced layoffs, while some Asian companies too have done the same.

Many firms in the banking, financial services, insurance, automobile, airline, etc sectors that were earlier planning to hire more have put their plans on hold. Most of these companies have actually begun to downsize their staff. So check out where the axe is falling. . .