Sunday, March 30, 2008

Nightmare on Code Street

Beware those in software - you could be next!

A very connected HR source in the Bangalore software industry says the nightmare has already begun. Each morning this person - a senior HR manager - sends a polite message to a software programmer to come to the conference room for a meeting.

Simultaneously, a copy of this message goes to system administrator and security. While you are in the conference room with HR. The meeting discusses how your skills are now out of sync with the company's needs and why they have to let you go. One month's salary is offered to you as severance.

While you are still recovering from your shock, your Internet and WAN connectivity is shut down, and your workstation disabled, while a security personnel empties your cabinet in to a brown box and keeps it in reception.

This incident is played out with 4-5 people in a day, and continues for the week. The revered HR manager has now metamorphosed from recruiter to terminator.

The company I am referring to has 1600 staff and is based in Bangalore. I have withheld the name on request of my source.

The conclusion is that serious retrenching is currently on in the Indian software industry. The parameters for deciding who is to be let off are performance and last-in first-out (LIFO). LIFO is one reason why the attrition rates have dropped in the IT industry, because people know that the newer ones are sitting targets in a retrenchment strategy.

It is important to note that Pune and Bangalore real estate are driven by information technology, and programmers are the most egoistic of the lot, often spending beyond their means.

If you work in software, there is every reason to dread each morning.

P.S: I advise you to negotiate hard and throw a tantrum if you are in this situation. The HR source tells me that the severance budget is 3 months pay - but this is not given to the "lambs" who leave quietly, but to the "tigers" who create a ruckus. So in case, you are called for this meeting, be sure to make it as nasty and noisy as you can. It's worth the money.


Jawaid said...

I don’t understand all this; till few days back all people were saying sensex will fall to 12K and some even told 8K, apparently is never went and it will never go to this level (unless some political instability happens in the country). Since few weeks now, I’m receiving lot of mails that Indian reality market will crash soon. All the writers of these mails failed to give any logical and concrete reason leave alone reliable data.

Indian software industry was a regular target for these groups of pessimists and the funny thing is that they don’t cite any reliable data / survey report on the real situation. It is possible that some software companies’ bottom line will be affected due to recession in US and rising rupee. However, retrenchment in one particular company doesn’t reflect the industry-wide phenomenon.

Humblybob said...

Real Estate has started cracking. It is very usual for people to be in a state of denial and for sellers to hang on to their high rates. Usually takes about 1 year before retail start panicking. I suspect May 2008 will be a good time.

As for software industry, TCS, Satyam and many others have already started cutting the flab. So it is not just one company.

Such things usually play out in time. We can only expound our views.




Consider how the crisis has unfolded over the past eighteen months. The proximate cause is to be found in the housing bubble or more exactly in the excesses of the subprime mortgage market. The longer a double-digit rise in house prices lasted, the more lax the lending practices became. In the end, people could borrow 100 percent of inflated house prices with no money down. Insiders referred to subprime loans as ninja loans—no income, no job, no questions asked. - George Soros in latest book

everything’s going up, there’s a feelgood factor and people tell each other how much their houses are going up at dinner parties,” says Professor Mark Stephens of York University’s Centre for Housing Policy. “Then the music stops, as it always does.”

year, Japan was a more attractive market to put money in. If you look at the US, we can now get an internal rate of return of 25% there, so why would anyone want to come to India?” - a senior executive at an international financial services group, who did not wish to be named.

people told us house prices never go down on a national level, and that there had never been a default of an investment-grade-rated mortgage bond, "Mortgage experts were too caught up." - John Paulson, trader, who bet against subprime market and made $15 billion.

most puzzling are the real-estate projects of Parsvnath. Just have a look at the Pride Asia project near Chandigarh. They are asking almost US $300K-$350 K dollars for 2 bed room apartments. They have Villas in this project that costs more than US $1.5 million dollars. It is true that some people in India have that kind of money in India. However most of their wealth is black money and that can not be used to buy these properties. Obviously, these projects have been launched keeping NRIs in mind. - Sanjeev, comment from another site

Desai, aka Bani, the star of Balalji Telefilms's soap, Kasam Se, has been house hunting for over a year. She had almost closed a 2-BHK deal last year for Rs 1.5 crore in a Oberoi Constructions' building located at Andheri, Mumbai, but when she went back to confirm it, she was asked to cough up Rs 2.61 crore. Since then, she is still house hunting. - Mumbai Mirror


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