The Businesses Hit by IT Slowdown

12 06 2008

According to the annual report for 2007-08, published by the Union Ministry of Communications and Information Technology, the IT-BPO sector ended the year with a direct employment of two million people compared with 1.63 million a year ago.

 

Every one job directly created by the sector generates four additional indirect jobs related to it. Thus another eight million are estimated to have been indirectly employed by the sector last year, the report says.

 

Essential support services that will be least affected by IT slowdown include security, housekeeping, canteen services, hardware maintenance.

 

IT companies that have a high-level of on-site component use the services of a travel agency for overseas tickets, foreign exchange and visa services. BPO companies running 24X7 call-centers engage transport companies. These companies too will suffer, but only to a limited extent.

 

The sectors which will bear the brunt of IT downturn are: outsourced HR services, real estate, shopping malls, multiplexes, automobile, restaurants/pubs and of course, financial services.

 

– G. Mohan.

 

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One response

12 06 2008
sanjay nayak

Being in the industry, I am seeing some positives from this slowdown. The attrition rates are lower, companies have started rationalizing costs. Comanies have started focussing on alternate revenue models by focussing on newer markets, build solutions that are more reusable in nature. If this continues for few more quarters, there may be some interesting development in the industry including consolidation.

This slowdown may bring some sensible behaviour from IT folks while making purchase decisions. This will also reduce the difference in salary levels between IT and other traditional industry.

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