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For all the fuss in the world only 1% of IT workforce is laid off in India


Services sector contributes to 50% of India’s GDP but only employs a 25% of its workforce.

IT workforce is a very small percentage of the overall work force in India. IT comes under services sector and the fuss around any lay-offs is justified as it contributes towards the 50% GDP.

But isn’t it much ado about nothing? As per NASSCOM IT in India did not come under the grip of large scale layoffs. In fact only 1% of the workforce is laid off so far. That is almost negligible – if the estimates are to be believed. In other words it is a non-event.

If you ask someone at the outskirts of a city he has a completely different opinion. Many think that the global slump is because of IT. Few people working in textile industry or diamond industry would have known but broader population thinks IT is the culprit. Many in fact pity the IT crowd. We cannot give a economics 101 to them.

“This is the difference we are seeing today and it has not manifested in huge layoffs. In fact, the current layoffs would represent less than 1 per cent of the total industry, maybe, 0.5 per cent. Besides, any vacancies presently arising at companies are not being filled up, as hiring plans have been affected by lower growth rates,” (Business Standard)

So, this is to everyone out there. Situation isn’t bad. Not bad at all. And no, IT is not the reason for the slump. It’s the banks which screwed everything up. I mean everything. And I also mean all the banks.

The only sane people out there are the engineering students. They are the smart lot. In spite of being in a tough market they still prefer IT over anything else. Is that a problem or a solution? Food for thought and for my next post.

  1. Prats says

    I am not sure how much people pity the IT people, but the fact is IT people have always had the brunt of the perceptive bias.
    I have heard so many times (esp when looking to rent an apartment) “why are you being stingy you are in IT”. I don’t know how but the perception is that IT is a very high paying job, I agree the people made loads in the Stock Options Times, and during the early days but the perception kills an avg IT employee starting the career with very meager salaries trying to live with the Facade of big IT dream in the society which he can not even afford to start with.

    I hope the error finds the corrections in the perceptive markets :-)

    1. Sriram Vadlamani says

      I agree. Part of the problem lies with IT people too. They don’t bargain for vegetables and when I bargain I am the fool. Same is the case with every other thing.

      They don’t think twice. And thus they fed the whole ecosystem around that they have fat paychecks. Even if they did there is no reason to be conspicous about it. Because of that everyone else is feeling the pinch.

      IT people have a tendency to inflate salaries. Anything less than 1 lakh is not a salary. But, I am yet to find someone who is getting 1 lakh salary and who is not a middle-level manager and who doesn’t have 10 years of experience behind them.

      The blame should be a shared one, if we have to blame anyone.

  2. Mahendra says

    @Sriram, yes, NASSCOM is a body like FICCI, and employees are not its primary stakeholders, so it’s not surprising.

    I agree Indians are not used to layoffs and that’s the reason why companies prefer forcing resignations. But I don’t see any media hype surrounding this issue. Rather, IT bigwigs like Infy’s Mohandas Pai regularly lurk in the TV channels dispelling any notions of layoffs.

    The real stories and figures can only be found at IT employee oriented sites like and

    My overall response to your article is: Yes, IT is obviously NOT the reason for the economic slump, however, it would be wrong to assume it is not affected at all.

    1. Sriram Vadlamani says

      I agree. Since we don’t have a mechanism to check and confirm we might not be able to assess the real impact.

  3. Sriram Vadlamani says

    @Mahendra : A chilling read and must be the other side of the story. NASSCOM is supposed to be the support body for Software. It might just be for the companies and not for the employees.

    But, I still think it is not that widespread as the media is telling it to be. As Phillip pointed out India is not used to lay-offs. And now they are.

  4. Mahendra says

    Official corporate and NASSCOM figures have to be taken with a pinch of salt. The real situation on the ground is different, because of ‘forced resignations’ that do not count in these official figures.

    Outlook India’s cover story reveals the dark underbelly behind Indian IT’s no-layoffs posture:

  5. Philip says

    Its our 24×7 media that is creating the hype. Every news when scrolling around at the bottom of your TV screen for 24 hours multiplied by 50 news channels is sure to make you press the panic buttons.

    After a lifetime of working for govt jobs, Indians are slowly getting used to working for private companies. They are slowly getting used to hire and fire concepts which was alien to govt jobs. This hype will soon die off.

  6. GC says

    Maybe true, but that isn’t putting any money in the wallets of the pink-slip recipients.

    Also, engineering students are in IT for a simple reason – easy money. Not because it’s “safe money”, and definitely not for “glory”.Show them an equally profitable tech job from their field and they wouldn’t even think twice about jumping ship.

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