Are global layoffs likely to benefit techies in India

As I have pointed out in my earlier post, Offshoring is good for America, and even Jack Welch has stated that Outsourcing Is Forever - Jack & Suzy Welch, thus this story, in the Econimic Times, which has a slightly different take, is worth a look. In the end, I Think,  it will come down to how effectively the Indian side handles the PR wrt this issue.

Global pink slips in the tech industry may end up benefiting India. As big-wigs like Intel, Sony, CA, IBM and Sun Microsystems announce the return of retrenchment, Indian HR honchos foresee a spurt in demand for low-cost, high-skilled destinations like India in the near future.
The chip-maker-in-distress, Intel, on Wednesday announced that it will reduce its global work-force by 10,500 by mid-07. But this is unlikely to have a huge impact on its India operations, which incidentally, is its largest development centre outside the US. The company refused to put any India numbers on the table, but indications are that investment commitments of over a billion dollars will stay, so the local layoffs may not be high. However, indications are that there could be a cap on hiring.

Indeed, with cost-cutting a major priority, Intel may outsource more to India, say market sources. “India could stand to gain from these global layoffs. Due to talent availability at cheaper costs in the Asia Pacific, Central America and East European regions, business processes are being restructured and shifted to these locations," says Pradeep Udhas, KPMG executive director and CEO, KPMG Resource Centre.

For instance, IBM, which announced axing of 13,000 jobs in Europe and the US, followed it up with plans to treble its investments in India over the next three years by pumping in $6bn towards its operations here.

Rakesh Malik, practice leader-global sourcing (India), Hewitt Associates, said: “With global competition fuelling restructuring efforts to attain greater efficiencies at low costs, firms are exploring different geographies outside the US.” A talent crunch in some markets further triggers the search for newer alternatives, he added.

Terming layoffs announced by Intel as a ‘correction’, Nasscom president Kiran Karnik said: “The industry goes through a business cycle. It is a temporary phase where the company is attempting to strike a balance between manpower and demand. As the business moves towards an upcycle, I am sure they will add people.”

Experts, however, point out that India Inc, through industry associations like Nasscom, needs to intensify efforts to manage its PR globally in order to deal effectively with the sensitive issue of job losses in countries such as the US.