Recession Impact On Indian IT Industry: There is a danger of recession in Europe including America. Its effect is going to be on the employees working in the IT sector of the country. The country’s IT companies are prohibiting or deducting bonuses given to their employees. Actually, these IT companies are worrying that due to the recession in western countries, US and European clients can cut their IT expenses.
Recently, the country’s leading IT companies Infosys and Wipro have decided to cut the Variable Pay Portion of their employees. In this way, from now on these companies have started cutting expenses. Despite the Corona era, due to the tremendous demand, IT companies did tremendous hiring and also gave full packages to their employees. In fact, due to the increase in cloud computing, digital payment infrastructure, cyber security and cryptocurrency transactions, there was tremendous demand in the Corona period. Due to this, IT companies did tremendous hiring. Although it is believed that there is a lack of skill people, then there is no shortage of those leaving the big IT companies. 60 percent more people are leaving big IT companies than two years ago. In such a situation, the companies have to pay more salaries, so the impact is being seen on the margins of the companies.
Infosys operating margin has come down. Infosys’ operating margin in the first quarter of 2022-23 is down to 3.6 per cent from 20.1 per cent a year ago. At the same time, Wipro’s has come down from 18.8 percent to 15 percent. Wipro has stopped the variable pay of mid and senior level employees and has decided to give 70 percent variable pay to junior level employees. IT companies are also cutting down on the hiring of new graduates. However, the country’s largest IT company TCS did not make any deduction in the variable pay and has made the payment without delay.
The pressure on IT companies can be gauged from the fact that for the first time in the last six years, the Nifty’s IT index has fallen by a quarter percent.
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