IT companies may shed up to 40,000 mid-level employees: Mohandas Pai

India's information technology services companies may shed 30,000 to 40,000 middle-level employees this year as growth slows down, IT industry veteran T V Mohandas Pai said Monday.

The former Chief Financial Officer of IT major Infosys Ltd termed these job losses as once-in-five-years normal phenomenon with maturing of the industry.

"As in all sectors in the West, in India too when a sector matures so many people will be there in the middle level who will not be adding value to the salary they get," Pai told PTI.

Promotions are okay when companies are growing fast but when it slows down, people getting fat salaries will aggregate at the higher level, prompting companies to periodically reset their pyramids, and shedding people, he said.

"It's going to happen again and again and again every five years," said Pai, Chairman of Aarin Capital and Manipal Global Education Services.

"Nobody is entitled to a fat salary and high-paying job unless you perform, right? You have to deliver value".

"All across industry, may be 30,000 to 40,000 in a year...," he said when asked about the number of middle-level staff who would lose their jobs.

But Pai said about 80 per cent of those who lose jobs would have employment opportunities in industries in general if they are specialists.

IT industry holds key in strengthening ties with US: Indian envoy in US

The Indian IT industry is an important stakeholder in promoting business relations between India and the US as it contributes to the competitiveness of global operations of American companies and creates thousands of jobs in the US, Indian envoy Harsh Vardhan Shringla has said.

Participating in a discussion on 'America's Highly Skilled Workforce, the Talent Pipeline, and H-1B Visas' organised here by Wilson Centre's Asia Programme and national association of software and services companies (NASSCOM), Shringla on Tuesday said the Indian IT companies have invested billions of dollars across many states in the US.

"The Indian IT industry has been an important stakeholder in promoting and supporting stronger bilateral business relations between our two countries, the Indian Ambassador to the US said.

Indian IT companies, he said, have "contributed to the competitiveness of global operations" of US firms. "And in doing so have also supported hundreds of thousands of jobs through direct, indirect and induced jobs in the US," he added.

According to an estimate, the Indian IT companies have invested more than $50 billion in the US. The firms, he noted, are deeply embedded in the roots of American society and their contributions are exceeded far beyond the economy.

Shringla said the movement of highly-skilled individuals, Indian professionals in the US through programmes like H-1B has been a mutually beneficial partnership.

He said there is a 2.4 million staff shortfall in the high-tech sector today in the US. This coupled with a very low rate of unemployment below three per cent, clearly there is a shortage of people with the requisite experience and expertise in the sector.

Many of the Indian companies, he said, have pledged to employ more people in the US. "For instance, Infosys has programmed to employ 10,000 US citizens in their operations. They have gone from campus to campus recruiting people, training them, and equipping them for the high-tech profession that they will join," he said.

In his remarks, Shringla praised the recent passage of a bill by the House of Representatives that proposes lifting per country cap on green cards. The move is likely to benefit Indian IT professionals in the US. This is an important initiative, he said.

The event launched new reports produced by IHS Markit on H-1B visas and the global IT services industry. The reports include expert analysis of the issues that companies are experiencing with the visa programme and feature exploration of industry and government workforce and STEM education initiatives.

NASSCOM President Debjani Ghosh said technology companies from India contribute about $78 billion of sales in the USD, and about 170,000 jobs are created directly by these tech companies from India, while close to a million jobs are created indirectly.

Close to $16.3 billion of wages are paid by these companies of Indian origin in the US. While NASSCOM contributes about $185 billion to India's numbers, we also contribute $28.2 billion directly to the US dollar GDP and $7.7 billion in terms of state and federal taxes in the US, Ghosh said.

Nasscom takes SME delegation to US to strengthen strategic alliances

As part of its efforts to strengthen strategic alliances between the US and the Indian IT industry, the National Association of Software and Services Companies (Nasscom) recently took a delegation of SMEs to the US to help them explore the possibilities of entering the American market.

Said to be a one-of-its-kind engagements programme, the delegation of small and medium enterprises (SMEs) visited several states, including New Jersey, North Carolina, Ohio, Michigan and Texas, from July 15 to 22.

They got a chance to meet top government officials, including the governors of New Jersey, North Carolina and Ohio, besides companies cutting across industries, economic development departments, and law firms and consulting firms, a media release said.

"This programme is a step forward towards doing business in the US, as it helps strengthen strategic alliances between the US and the Indian IT tech industry. The programme will help strengthen the commercial and economic ties between American and Indian businesses to create a win-win scenario," Shivendra Singh, vice president and head of Global Trade Development, Nasscom, said.

It would further support the SMEs by ensuring hand-holding and providing low-cost shared services landing options in various target states, he added.

"The fact that this delegation has been hosted by governors in three states clearly highlights the value and commitment they have to supporting Nasscom and its member companies looking to make forays in the US market," Singh said.

Reinforcing the support to the SMEs to ensure their growth in US, Nasscom also signed a memorandum of understanding (MoU) with Automation Alley, a not-for-profit trade body from Michigan.

The MoU envisages a low-cost shared services model of soft landing, regulatory and legal support and supporting the Nasscom member companies to engage with the local business ecosystem.

The US remains the single-largest export market for the Indian IT industry. However, it is also the market where the SME segment struggles to find the right base, the appropriate landing point to enter and cater to the market, the release said.