Another post on ethics in Indian IT

We’re currently transitioning some work from a subcontractor back into our company. Through the transition, it is disturbing to see some of the lack of ethics that are being displayed by people at various levels in the subcontracting company. Some specific examples are

- People accepting our offers in writing and use that as a negotiating tool with a third company. Once they get a job, they turn down the offer throwing our entire planning out of gear

- - People in the higher management of the subcontracting company trying to convince people who have accepted our offers to reject them by offering onsite opportunities and other perks. While this is not a violation of the contract, it clearly goes against the spirit of the contract

The first case is not very surprising because the Indian IT professional’s lack of ethics and pursuit of Mammon is well known. But, it is very frustrating to see Indian IT companies trip each other in this manner. It also causes a project that has been planned over many months to suddenly shift into a constant fire-fighting mode.

A fallout of the situation is that I have to shuttle between Bangalore and Chennai to take control of the transition. I will be getting very familiar with Indian railways over the next few weeks.

Bad times for Indian IT

Typically, companies in the US outsource their routine maintenance and low end project work to India and keep the really important projects inhouse or work with local vendors here. Most large companies that have offshoring programs have already offshored most of these functions to India. For the remaining companies, if they have not offshored yet in 2007, it is likely for a good reason and I doubt it will happen anytime soon. Even if it does, I feel that the potential increase in business will still not be able to make up for the loss from projects that have shut down due to budget cuts. You will never hear anything like this from the companies or the analysts, who continue to portray a rosy picture and feel that a slowdown will only benefit Indian IT. But, I hear enough news to the contrary and think that companies are preparing themselves for tougher times ahead.

Look at the evidence
IBM fires 700 people.
500 people "voluntarily resigned" from TCS.

I'm sure that there are similar stories being played out elsewhere. I see enough evidence in my own firm. All the managers were called for a meeting last week and informed that the overall utilization was low and a major drive has been launched to fill up the open positions from the bench pool. And yesterday, we learnt that the notice period has been slashed to 1 month. Add to this the fact that promotions, bonus, salary hikes which are typically completed by early January have yet to be announced and it does seem clear that job cuts are on the horizon.

The Indian economic growth story depends a lot more on the IT sector that many people realize. It's the promise of huge salary increases and large disposable income that keeps IT folks spending on a lot of goods and services and leads to a boom in those sectors. So, a slow IT sector is not only bad news for itself, but for many other sectors as well.