Global Recession In IT?????

IT sector apprehensive of government action

According to G. Vijayaraghavan, former Chief Executive Officer of Technopark, the government decision would be damaging to the whole sector. “While most IT firms have tightened their belt in the wake of the global recession, the decision to trim the workforce is nothing new. It happens every year. We are not talking of a mass retrenchment here. None of the laid off employees have submitted a complaint to the government,” he said.

Satish Babu, president InApp software services and secretary of the Group of Technopark Companies (GTECH), said the government action amounted to an infringement on the rights of the companies. He felt that the action may have been driven by political considerations.

“There was nothing for the government to be concerned about. Dire measures were uncalled for. No company is firing left and right. IBS, the firm in question, is not a fly-by-night operator. It is a well- established company with several years of experience and global-level operations. By creating a false impression of retrenchment, the government will only erode the credibility of the IT sector,” he added.

Mr. Babu said most companies were putting a freeze on recruitments rather than laying off employees in their bid to stand the global meltdown. “It is unfortunate that the government has adopted a confrontationist approach when it should be working with the IT sector to help it tide over the situation,” he said.

Desperate measures

Mr. Vijayaraghavan said IT firms may be forced to take desperate measures to tackle the recession. “Modern industries will need to take timely action in the face of a crisis. As many as 1,000 to 2,000 employees in Technopark may lose their jobs if the economic crisis lasts for more than six months. But all of them will return to their jobs once the crisis is over,” he said.

He flayed the government decision to carry out the inspection in full media glare. “It is a suicidal approach that could scare off investors. Already, three or four companies have moved out of Technopark over the last one year. There is urgent need for the government to send out positive signals to restore the confidence of investors,” he said.