[INDEX |
NATIONAL
|
WORLD
|
PERSPECTIVE
|
COLUMNS
|
MONEY
|
ENTERTAINMENT
|
HEALTH
|
TECH
|
LETTERS
|
SUBSCRIBE]
FinalCall.com News
World News
India, home of outsourced jobs is losing jobs
By Keya Acharya
Updated Jan 19, 2009 - 2:47:00 PM
BANGALORE, India, (IPS/GIN) - The global recession appears likely to cost this information technology hub at least 50,000 jobs.
The Union of Information Technology Enabled Services (UNITES) Professionals, India, made that prediction for the first half of 2009.
Ever since United States majors like General Electric and American Express shifted their back office processing operations to India in 1994-96, the world’s major corporations, from the airlines to banking industries, resorted to business process outsourcing to this country, raising jobs from 553,000 in 2007 to the current 1.6 million.
Tight labor markets in the United States and Europe, linguistic capabilities, reliable and cheaper telephone communication and operational costs together with a government setup that encouraged foreign direct investment with tax breaks, have been major factors in the growth of the sector.
India’s information technology enabled services sector has been growing at a steady 30 percent rate over the past few years, and overall sales in 2007-2008 stood at $52 billion. But the slowdown in the U.S. and European markets has led to sudden job losses that have raised new labor issues.
UNITES, created in 2005 with active support from the Switzerland-based Union Network International, grew with this new and huge workforce and has been raising important questions about working conditions, gender discrimination, sexual harassment and employee rights.
UNI is a federation of professionals in skills and services across the world. It has about 900 affiliated organizations in 140 countries, representing more than 15 million members. Many of the affiliated organizations are directly involved in creating the new knowledge economy.
UNITES has grown rapidly to 18,000 members from the business process outsourcing and the IT industry, spread across five major metropolitan areas with legal status under India’s Trade Disputes Act.
About 50 percent of the workforce consists of women and so does 28 percent of the IT sector.
Fifty percent of UNITES members are from Bangalore, pointing to the city’s large concentration of India’s entire business process outsourcing sector, higher than the world’s similar emerging centers in South Africa, the Philippines, Latin America and Eastern Europe.
But the industry’s economic links to the U.S. and British recessions have played havoc on the local scene, with at least 10,000 jobs in the industry being lost between September 2008 and December. Others, mostly junior level executives, have taken salary cuts ranging from 25 percent to as high as 75 percent.
UNITES General Secretary Karthik Shekhar said the prediction of another 50,000 job losses has been estimated from the uncertainty of President-elect Barack Obama’s new policy on outsourcing and the bailout packages by the British government and financial institutions, which may result in conditions being imposed on local jobs.
“We are asking for top management to take a cut first to help pan out the costs,” Mr. Shekhar said. “Cutting costs should start from the top.”
Mr. Shekhar also said the country’s lax laws and “the red carpet treatment extended by our government to foreign companies” are aiding institutions that lay off workers without due benefits, and with insensitive handling.
UNITES members, Mr. Shekhar illustrates as an example, have in some cases discovered they had been “sacked” when their entry-swipe cards stopped working abruptly or were given two hours’ notice to leave their workplaces.
Internationally, most firms face stiff labor laws, Mr. Shekhar said, citing the case of the Walmart chain, where 116,000 workers took the company to court for failure to provide lunch breaks, leading to the court ordering Walmart to pay $172 million to the workers in compensation.
But UNITES said India lacks laws on severance rights for workers in the IT sector.
UNITES faces opposition from the IT-industry’s National Association of Software and Services Companies, which represents only the companies or “employers” and sees UNITES as a potential threat, given India’s history of confrontation between trade unions and employer-companies. The business group said “research and interaction is not in favor” of the prediction of huge job losses.
