Cost Cutting in IT companies on US recession fears

The world is moving through really tough times, so are the IT companies. With the clients cutting heavily on the IT spending and new projects being scrapped, the IT companies in India are doing all they can to cut the costs.

The IT companies are really worried about the recession fears in US and have gone to take measures to cut the costs as much as they can. In India, it was TCS which went for a layoff following TCS salary cuts. Then it was IBM which axed 700 jobs across all over India.

Following that sequel, the IT companies went for a Reduction in Perdiem for onsite visits. And now, even the petty things like internal travel is under the scanner for cutting costs.
I As per the news from the leading newspapers from India, Senior executives, including in the vice-president and general manager levels, are being asked to travel by cabs, that too with one or two other colleagues.

Someone required to travel from Bangalore to Hyderabad is no longer allowed to book a flight – he is asked to hire a cab, that too with 2-3 colleagues. The journey may be tiresome and time-consuming, but saves a lot on costs – that is what matters most!

From Bangalore, a return AC cab with infotainment on board costs Rs 7,500 to Hyderabad, Rs 5,000 to Chennai and Rs 7,500 to Kochi, against the return air fare (for a single person) of Rs 4,500 to 6,500, Rs 3,000 to 4,000 and Rs 3,500 to 4,500 respectively. “The logic is that at least three employees can get to a client’s location and return at a minimal cost. The same cab can be used for local logistics support at the client’s place, which again is economical,” said a logistics in-charge of a tier 1 tech major.

Even the individual managers and executives do not like this idea. How can they like it – it’s human nature. Someone habitual of staying in a 5 star hotel cannot be comfortable in a road-side lodge, even if it comes with a cozy AC. People also find it humiliating – especially with the way relatives look at you. Someone who used to travel by flight is now moving around in a cab.

No one knows whether it is a short term cost-cutting business or will this last long, but one thing is sure. The Companies are making a good use of the timing. In India, this is the appraisal and salary review time. They may be taking all these steps to create a hyper atmosphere to give minimal or no salary hikes – that may last for next 12 months.

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