India’s large IT companies face severe crisis from appreciating Rupee and refusal of native Indians to work for these companies
Kirit Chauhan
Jul. 23, 2007

It is just not prestigious to work for so called ‘Desi’ body shops these days when IBM India is willing to offer better salaries and better benefits’, says a software engineer in one of Bangalore Pubs.

The so-called Desi (native) Indian body shops that call themselves IT majors, face severe trouble. Their business model was to serve American and European companies with cheap Indian software talent. The software professionals are opting to work for the Americans and Europeans directly. In addition, because of appreciating Rupee and severe devaluation of dollar, the profit margin of these companies are shrinking like never before.

Indian IT companies, grappling with an appreciating rupee, are also finding it hard to retain employees with the top-four firms - TCS, Infosys, Wipro, and Satyam - witnessing an exodus of about 10,000 people in the first quarter of the current fiscal.

Although the four firms collectively hired more than 25,000 employees in the April-June period, the net addition was just 16,300 taking their total headcount to 2,85,357 employees.

Experienced employees are leaving the Indian IT body shops and the new hires are far less talented. These IT companies are now targeting secondary cities and recruiting very low quality talents.

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