Must read for those who plans to come USA..
It’s bad news for many companies across the country as the threat of economic slowdown looms large. AT takes a look
A pink slip can be soul destroying. Thousands across continents are now dealing with it. The US is going through a rough recession. The Wall Street will never be the same. Its oldest and fourth largest investment bank Lehman Brothers filed for bankruptcy and Bank of America has bought Merill in a $50 billion stock deal.
Times are tough. Back at home too. Satyam computers, which has just started giving pink slips to its employees could potentially downsize its workforce by a whopping 4,500 employees. Leading IT companies are now getting ready to face the effects of a massive slowdown in the US market.
Industry sources maintain that most companies in US including the blue chip, Fortune 500 firms—would now try to cut costs and investments. In the process, Indian software firms - which cater to a number of premier companies will face the heat. As says Suraj Kumar, a senior manager working in a Bangalore-based top IT firm, “Most top IT companies here were doing work for Lehman and Merill Lynch. So this will affect them hugely. In the IT sector, 60-70 per cent of business is linked to the US economy. So, the recession is bad news for us.”
Agrees Ashish Chaudhary. marketing head of an IT firm, “The international market has never seen such bad times. In the IT industry, there has been cut down and closing up of various sub sectors due to varied reasons. This is owing to not only the markets going down but also industry saturation and limited resource capitalisation.”
But the bad news is just not limited to IT only. Uncertainty over the future of AIG in the US is going to affect the insurance business in India. As says Harsh Hinduja, an analyst with a leading insurance firm, “The insurance firms need a constant flow of cash. With the international markets crashing down, the Indian investments will definitely hamper. Especially, the expansion projects that were planned shall take a backseat now. But this is not restricted to some firms as people perceive it. It is a ripple effect that is created.” The shut down and bankruptcy has affected many people across countries and the strains are also showing. “There is a large mass of employee in the lower strata who are getting affected by the closing down of firms. Those individuals who have a brand to their name, have an option of picking up another job with a good firm. But many just don’t have this advantage. The notice period that the companies give, is quite less for someone to secure another job if he doesn’t have an extraordinary background, “ says top finance professional Rahul Sharma, who was till now working in a leading investment bank.
But then many companies are having their share of sunshine. As the US economy slows down the US companies would be looking for more cost effective solutions. So it’s good news for outsourcing. As says Kaushal Mehta, founder of a leading Ahmedabad based BPO, “The US slowdown effect is selective. The closing down of Lehman is a big shocking news. But the economy can’t go down further. Now, it’s a tough time for large and small companies. For midsize companies it’s a growth time as we are getting the advantage of cost cutting by the US companies.” But everybody is pinning their hopes on a fast recovery. There lies the hope.
Source:Ahmedabad Times
