IBM – The darkhorse in the Indian IT sector!

It is common knowledge that the IT sector is the largest employer of human capital in the country. TCS, Infosys, Wipro, Mahindra Satyam and Cognizant together employ more than 10 lakh people across the world. But as usual, their highest numbers are from India.

As of June 30, TCS is the largest private sector employer in the country with 1,63,700 employees. But who do think is the number 2? Ambani, Tatas, Birla’s? YOU ARE WRONG! The answer is IBM. I was as shocked as you guys after reading this. But then there are a variety of reasons for this for this.

The fact that IBM which is US headquartered has over one lakh employees in India is its best kept secret. Till 2007, they were declaring their numbers which at that time stood at 73,000. But after that they started saying that they are not worried about numbers as much as geographical expansion.

When Obama was fighting for the elections and even after he has become the president, he has always been against outsourcing jobs to the Indian sector. He has always been vocal about how kids in USA should work harder to surpass the Chinese and Indian kids. He had also voiced his disapproval on companies who were not paying taxes while working in India. All these developments had the IT sector worried. But since then, his statements have been just that ‘mere statements’.

IBM Daksh, the BPO arm employs 50,000 people while IBM Global Services and IBM Labs employ a combined number of 80,000 people. Some people have already said that IBM could have more number of employees (1.3 lakh) than Infosys (1.14 lakh).

So why has a company which is headquartered in the US employed more people from India?

• Since the recession, very few companies have been able to afford paying very high salaries to their recruits
• Companies have looked to cut costs in every way possible in terms of human capital, processes and also equipment
• Though it is still not very easy to do business in India even today, the IT sector has a lot of support from the government at the center
• There is a huge base of potential human capital in India with IT companies hiring close to 20,000 people every year
• It may be difficult to acquire land for industrial units. But the most SEZ areas in the country are for IT companies and acquiring land for such purpose is easier

Seeing all these characteristics, it is truly understandable that IT companies the world over are looking to establish their base in India or China.

Do you think other IT companies across the world would do the same going into the future? Is it sustainable for IBM in the future?