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Bangalore: In a move that could bring a smile to many faces, Tata Consultancy Services (TCS) has announced that it will hire 25,000 people globally in 2009, with 90 percent of them in India alone. Though the number is bigger when compared to the hiring these days, it is less than last year when TCS appointed around 35,000 people.

With this recruitment drive, TCS also plans to expand its presence into the tier-II cities in India. “We will be hiring 25,000 people this year, which means roughly 25 lakh square feet of work space required and, therefore, we need to grow outside the metros. Tier-II cities are our only focus for expansion in the country as the top rung are clogged and saturated,” said Tanmoy Chakrabarty, Vice-President and Head of Government Industry Solutions unit at TCS.

Following this hiring spree, the total global manpower of TCS would go up to more than 1.8 lakh. This will put the IT services provider among large private Indian employers like Tata Steel, which has the total employee strength of two lakh. Going forward, the company, which has an estimated 32 percent market share, plans to cash in on the Indian government’s plan to invest Rs. 40,000 crore on IT services.

Currently, 70 percent of the IT segment’s revenue is from India, while the rest comes from the U.S., Latin America, Africa and South East Asian countries. However, the revenue contribution from Indian government businesses to the total company revenue of $6 billion is less than five percent, which the company intends to increase to more than 10 percent in the next three years.

To ensure that their offices don’t get flu-ed out, IT firms in Pune are adopting preventive measures at the workplace including video conferencing and the option of working from home.
One of India’s IT hubs, Pune is home to over 200 IT companies, including the top names in the industry, and employs more than 2 lakh people. The city is among the most-affected by swine flu with their number increasing by the day.

In their effort to keep the flu at bay, most IT companies undertake daily checks on employees and those having temperature of 100–plus degrees Fahrenheit are sent back home. In fact, at Fujitsu Consulting even drivers who drop the employees home have to undergo a temperature check before entering the office complex.

Even employees whose family member at home is not well are sent back home as they are likely be a carrier of swine flu. When they return, they have to produce a medical certificate stating that they are healthy, a Fujitsu official said.

As IT firms are centrally air-conditioned, employees have also been given the option of working from home. Video conferencing has now replaced face-to-face meetings when employees enter the city from flu-hit areas. Infosys Technologies, on its part, has already issued travel advisories restricting travel in and out of Pune.

Bangalore: In move to reduce the burden on their clients due to recession, IT majors are cutting down on their billing rates by almost 35-40 percent. According to analysts, the billing rates have touched the lowest ever rates at $16 per hour and they predict that this will continue till first quarter of 2010.

Avinash Vashisth, Chairman and CEO, Tholons, an offshore advisory firm says, “Last month has seen unprecedented cut in billing rates even for existing customers.” According to Vashisth, large testing services, and of services of similar value, $16-20 is the prevalent rate. These rates are almost 30-35 percent lower than the rates being charged earlier this year and steeper than the 20 percent cut that British Telecom had demanded from Infosys and Tech Mahindra earlier this year on some old and new projects. Also higher-end projects like SAP have faced pricing cuts of around 25 percent, which is again more than what it was earlier this year.

According to The Economic Times, top IT firms are offering such rates in the form of introductory discounts for new clients, and for a year or two for existing clients. Another worrying factor for the IT firms is that despite the rate cuts, there has not been a corresponding rise in the volume of deal flow, in either highervalue or the lower end services.

Diptarup Chakraborti, Principal Analyst at Gartner, says that he does not see the situation improving before Q1 or Q2 next year. “Good old days are not coming this year for sure,” Chakraborti said. A Gartner study says prices of IT services in outsourcing are anticipated to shrink well up to 2010 due to an uncertain economic climate, IT budget constraints and general market consciousness.