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Employee inefficiency to trigger more pink slips in IT industry
By siliconindia
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Wednesday, 22 October 2008, 23:04 IST |
2 Comments
Mumbai: More IT companies may incline to the pink slip saga with the efficiency of the employees declining. While almost half of the software companies in the sample reported decline in revenue per employee, two-third saw a fall in the net profit (PAT) of each employee including Infosys, HCL Technologies, Oracle Financial Services and MindTree
But its just seven percent of the large companies which is witnessing the erosion in employee revenue, while the number was much higher at 22 percent and 32.6 percent for the mid-sized and small companies. As reported by Economic Times, a study by its research arm ETIG reveals that two out of seven companies or about 27 percent of the companies reported lower revenue per employee in FY08 compared to the previous year. Moreover, 39 percent of the companies analyzed saw a drop in the net profit (PAT) per head and among this one of four firms reported the decline in the topline. The study also showed that large companies with a revenue of 
5,000 crore fared better than the mid-sized companies (sales between 500 crore and 5,000 crore) and smaller firms (revenue less than 500 crore).
However, the banking sector is almost insulated from this slowdown, with among 49 banks only HDFC reported a similar trend in its employees. Infact, the financial institutes have already resorted to slashing of workforce. But Sarjeev Sethi, CEO People Connect, warns by saying, "The banking sector was doing well until a few months back. This is just the tip of the iceberg. In December- January, the banks would probably see worse."
Apart from the IT and the banking sector, there are the auto ancillary and textiles firms who are stroked by the same problem. Even, cement, housing finance, housing and construction and engineering are feeling the pinch of the slowdown.
5,000 crore fared better than the mid-sized companies (sales between 500 crore and 5,000 crore) and smaller firms (revenue less than 500 crore).
However, the banking sector is almost insulated from this slowdown, with among 49 banks only HDFC reported a similar trend in its employees. Infact, the financial institutes have already resorted to slashing of workforce. But Sarjeev Sethi, CEO People Connect, warns by saying, "The banking sector was doing well until a few months back. This is just the tip of the iceberg. In December- January, the banks would probably see worse."
Apart from the IT and the banking sector, there are the auto ancillary and textiles firms who are stroked by the same problem. Even, cement, housing finance, housing and construction and engineering are feeling the pinch of the slowdown.