[sdp1975]

Revenues of big tech companies went up significantly during Covid and they ramped up their headcount. Google was hiring aggressively in India. Companies thought that the party would last forever and didn't forecast their growth and hiring needs properly. The Ukraine war accelerated the downturn.

Now things are returning to normalcy and liquidity is being drained out by all central banks. This is affecting their growth. They just need some excuse to cut down costs and instead of taking responsibilty, the leadership is blaming the employees. But as Samurai pointed out, blaming the employees in public is really odd and makes no sense either. There's always internal talk on productivity and headcount, but I don't think it's this vocal.

[am1m]

One more layoff-contigency tip, if you work in a job function that has freelance opportunities, you can leverage those. I work in such a function and once in a while get contacted by former colleagues or friends who need some freelance work done. I've never been able to take up one because I wouldn't have time and it would be in conflict with my full-time job, so I usually refer a couple of people I know who are full-time freelancers. But I've realized the importance of keeping note of who asks. Someday, it might come in handy.

Also, collect samples of your work at each job. Obviously nothing confidential or related to company IP, but it helps to have samples of recent work. If you get laid off, it'll happen suddenly and chances are you'll lose system access instantly, so collect those before you need them.

Same with LinkedIn recommendations- ask before you need them. Another thing about LinkedIn, keep it professional. Resist the urge to treat it like another social media site. Too many people are posting and liking personal posts, political posts and rants. If a potential recruiter checks your activity, they can see the kind of posts you have liked. Better to present a professional front and keep the rants for the other social media apps.

[ppc_rgs]

Early in my career, I focused only on long term investments and simply ignored short/mid term ones. However, it did not work as I had to break my long term investments to fund big ticket investments/down payments. Had I split my investment, I may be in a better place financially than where I'm today. May be.

I felt that if one builds a suitable corpus for retirement, it can be used to create a passive income for retired years. This is true, however, I started to think that passive income should start even during our working years, at least to cover EMIs. That way, we can sleep peacefully at night. We can use the additional income to pre close the loans, thereby become debt free at the earliest.

Having said that, it is not easy to create a reliable, regular passive income which beats inflation. Or I have not figured it out yet.

[sunilch]

Originally Posted by ppc_rgs

Having said that, it is not easy to create a reliable, regular passive income which beats inflation. Or I have not figured it out yet.

It is not possible to have this simply because if was the case, more people will do so and hence more money will chase the same instruments. This will either drive the returns down or lead to increase in inflation. So it is never going to happen for a sustained period. Short term blips are part of life so occasionally we may see some investments beating inflation.

[gururajrv]

So these high tech companies do not have a basic tool that keeps the accountability of each employee that is by recording their time on production line? I’m sure, their departments atleast 70% of them should have this basic tool and if they say they don’t, it’s absurd! They for sure have tools keeping a close tab on their employees and making a remark like this shows somethings not right (probably due to incoming recession)?

[sunilch]

Originally Posted by gururajrv

So these high tech companies do not have a basic tool that keeps the accountability of each employee that is by recording their time on production line? I’m sure, their departments atleast 70% of them should have this basic tool and if they say they don’t, it’s absurd! They for sure have tools keeping a close tab on their employees and making a remark like this shows somethings not right (probably due to incoming recession)?

Your assumption is wrong. IT Services companies, if those are what you are referring to, don't work on productivity basis. In fact in reality they work on the opposite of it. As long as the project is alive, they will bring in a face/name to bill for it regardless of the productivity. The face/name will keep on changing due to attrition or work quality issues but the billing will go on.

Hence they will never pay a high salary for good quality talent as has been evident since last 30+ years. Their business model is not built on quality but only quantity.

During economic downturn, certain projects are shelved and hence you see some firing. Otherwise the billing meter will go on.

[V.Narayan]

Originally Posted by sunilch

Hence they will never pay a high salary for good quality talent as has been evident since last 30+ years. Their business model is not built on quality but only quantity.

Given your several posts I presume you are an IT employee and maybe suffering some frustration with your employer to write this statement. India's $227 billion IT industry did not get created in 3 decades by not having a focus on quality at an attractive price. Just the way when we buy cars we want the highest quality and the budget we can afford so does the customer that your employer (and you) deliver to. A young professional in India's IT sector draws a higher wage for the same experience and qualification than he/she would in other sectors. You can say I am upset with my current employer or he isn't giving me a fair deal. But to say that one of India's only global industries is all about quantity and not quality might be a little rich.

[sunilch]

Originally Posted by V.Narayan

Given your several posts I presume you are an IT employee and maybe suffering some frustration with your employer to write this statement. India's $227 billion IT industry did not get created in 3 decades by not having a focus on quality at an attractive price. Just the way when we buy cars we want the highest quality and the budget we can afford so does the customer that your employer (and you) deliver to. A young professional in India's IT sector draws a higher wage for the same experience and qualification than he/she would in other sectors. You can say I am upset with my current employer or he isn't giving me a fair deal. But to say that one of India's only global industries is all about quantity and not quality might be a little rich.

I have had respect for the IT service industry veterans who created these behemoths in a "difficult-to-do-business" environment (relative to current times) and providing employment to millions of Indians and indirectly developing a lot of real-estate in tier-2 cities. In fact, Bangalore became a large Tier-1 city in part because of the IT boom.

However, my respect ends there. Not here to contest but my employer has never been one of these firms. I have dealt with such firms for my work by utilizing their services at times for different projects. My experience is limited to meagre 15+ years or so and the number of projects is also limited compare to 1000x projects that these companies have worked upon. But it isn't different than what I have described. This thread has described multiple times how these companies pay very less and hence see very high attrition. Obviously, I can't reveal the numbers but here is the fact from personal experience:

1) A person working on my project will be paid X lacs per annum by his employer (large scale IT service company) but the billing rate for him/her that my employer pays is at-least 4X and in some cases 6X. I have never seen anything less than 3X in my working life and that was again only once.

2) The reason these companies get such business is simple - If IT is not my core business but is needed for me to operate my business, I do not want to be in the business of running the IT department. Fungibility and rapid ramp up or down facility is what my employer gets in return of paying this 4x-6x rates.

3) Most such companies (clients) understand that they can get the same work done in better quality at same rates that they are paying or may be even get a better deal at times but in their larger strategy plans, these things are at bottom of the presentation.

4) The quality work (or in few cases software products) that you may have seen coming out of large IT companies is coming out of only a small % of their total workforce. Simply because these projects or initiatives are 2nd priority for them and billing is their first priority. Some of those are built by the small % of passionate and highly skilled folks. Some of these are built using brute-force approach over the last 30+ years using the knowledge and expertise 'inspired' (Bollywood term for copying) from actual product companies but we do acknowledge the effort there. I have seen this personally myself (while working for a Product company) and also read about the same multiple times in newspapers or understood through my interactions with industry folks.

5) When employers (clients) such as mine care about quality of work, see IT as a core department/skill in their strategy, as well as want to take cost arbitrage advantage, they setup a Captive in places such as India, Poland, etc. These captives too employ in 10,000X each but they don't award contracts to such large IT service companies because they have burnt their fingers earlier. You will never see a JP Morgan or Morgan Stanley or large IT Product companies (to name a few) relying on Infy, TCS or Wipro to develop their large and complex systems. They will hire good folks coming out of Infy, TCS or Wipro without a second thought but would choose a captive site of their own in India and have direct employees rather than give remote work to others.

W.r.t to your point that a young professional from the IT industry earns more than an equally qualified person from non-IT sector and gets to work in a better environment (AC office, transport provided by company, WFH facility, etc) - I do agree on it. However, these factors vary from business to business and counter to this argument there are sectors where things are better as well when compared to IT. Other high paying sectors may not hire in such large numbers but there are sectors that pay better than IT Services.

[warrioraks]

Everything you have said is true in my opinion. But having worked on both sides - Consulting and Product, I feel it is unfair to compare them on the same metrics. It’s like apple to oranges since the mindset and business models of these companies are totally different.

Originally Posted by sunilch

1) A person working on my project will be paid X lacs per annum by his employer (large scale IT service company) but the billing rate for him/her that my employer pays is at-least 4X and in some cases 6X.

Isn’t that how companies stay profitable? What about product companies. Can you share how much they pay per annum compared to the employees contribution? Most probably you won’t be able to because it is harder to measure an employees contribution with such ease in a product scenario. But won’t be surprised if the payout vs contribution ratio is even worse for product companies. They are definitely generating a higher ROI per employee as compared to services companies.

2) The reason these companies get such business is simple - If IT is not my core business but is needed for me to operate my business, I do not want to be in the business of running the IT department. Fungibility and rapid ramp up or down facility is what my employer gets in return of paying this 4x-6x rates.

The same can be said for products. Companies can very well decide to build IT help desk tools, financial systems, leave management systems, etc etc if they have the time and resources at maybe better quality, lower cost and improved fitment to their business. But it’s not their core so they decide to procure from outside at higher cost, quicker turnarounds and lesser adaptability.

4) The quality work (or in few cases software products) that you may have seen coming out of large IT companies is coming out of only a small % of their total workforce. Simply because these projects or initiatives are 2nd priority for them and billing is their first priority. Some of those are built by the small % of passionate and highly skilled folks.

Building products is not the core of a services company so why should one judge them on the basis of that?

5) When employers (clients) such as mine care about quality of work, see IT as a core department/skill in their strategy, as well as want to take cost arbitrage advantage, they setup a Captive in places such as India, Poland, etc. These captives too employ in 10,000X each but they don't award contracts to such large IT service companies because they have burnt their fingers earlier. You will never see a JP Morgan or Morgan Stanley or large IT Product companies (to name a few) relying on Infy, TCS or Wipro to develop their large and complex systems.

I don’t think it’s as straightforward as this. Organisations outsource because of multiple reasons as you pointed already - Non-core departments, lack of scale, skills, quality, cost benefits are a few of them. An organisation setting up a captive does not necessarily mean they are unhappy with an IT company’s quality.

I get a sense from your posts that you regard product companies to be better than services companies. I definitely agree with this sentiment but for different reasons altogether. I have seen enough bad quality examples within product companies and great quality deliverables in services companies to not generalise.

[deehunk]

I read Sundar Pichai's statements, feel pity about his position. I have often felt that we reached saturation levels prematurely and now stuck at a dead end.

[adithya.kp]

I agree to what he is saying. Too many people chilling. And most of them are very smart in milking the company. The people higher up also don't care because they themselves have the same mindset. ( I am not generalising. But by and large this is the case in most of the mature companies)

If one is passionate, it's very difficult to work in such environment. Of course you could say, start something on your own. But in tech it's very difficult to start something on our own no matter how good you are. The entry barrier is very low in tech and also generating revenue is hard.
It's a very bad situation to be in. You don't like the office politics, culture etc, But without an employer it's very difficult to thrive.
It's similar to politics. Without being associated with a party, not many can win elections. Also, it's worse for them. If they were to change the party, there will be only one or two other party.

[xway]

Both Sundar Pichhai and Mark Zuckerberg are right.

There are many extra people not required otherwise.

Have worked for 25 years now in various sized IT companies.

In small companies that is below 100 employees most know each other and difficult to hide, so less chances of chilling employees. Though even here you can find some relatives of management put in trainee, HR, Ops type work not needing much skills or effort.

Large companies having thousands or lacs of employees this is highly prevalent.

These are 2 real life incidents that happened Enjoy -

In one company that I worked in finance team believe it or not there were 20+ employees to do work of a maximum of 5 people, out of which 3-4 were brought by the Director who can submit willingly even when he is wrong and can massage his ego, another 3-4 were his distant relatives brought to get trained and learn but all they did was chilling. Worst is he used to take upto 10K cash to celebrate his birthday and also eat away the team party funds personally with his family. And its no small company I am talking about.

Another funny incident, again a large MNC, a guy from my PG got rejected in interview, but he approached the HR again saying that he had cleared, the PM who had conducted the interview had resigned and left, the HR had records of his interview and pay but no score of his technical competence, even the primary recruiter had moved to other business unit. He got an offer letter from the new PM who had joined fresh and did not want to disturb any decision and keep himself safe too.

[apachelongbow]

Although it would pain me personally to see the large scale layoffs expected in the future, I feel it is actually good for the Indian economy. The higher remuneration in the IT sector has caused an unequal growth and given rise to higher inflation and cost of living in many cities. The classic example is say Bangalore and Hyderabad in India and that hellhole California in the US.
Sectors such as housing, real estate, stock markets and crypto are all under upward pressure due the insane amount of 'investor money' courtesy well paid professionals who are investing for their future.
A round of layoffs will help cool down this optimistic scenario of never ending grow and most people will be cautious instead of investing money in say real estate. That may well provide some affordable housing to those that need them.

[kiku007]

Originally Posted by apachelongbow

Although it would pain me personally to see the large scale layoffs expected in the future, I feel it is actually good for the Indian economy. The higher remuneration in the IT sector has caused an unequal growth and given rise to higher inflation and cost of living in many cities. The classic example is say Bangalore and Hyderabad in India and that hellhole California in the US.
Sectors such as housing, real estate, stock markets and crypto are all under upward pressure due the insane amount of 'investor money' courtesy well paid professionals who are investing for their future.
A round of layoffs will help cool down this optimistic scenario of never ending grow and most people will be cautious instead of investing money in say real estate. That may well provide some affordable housing to those that need them.

It might be worthwhile for you to check if the 2008 GFC and 2020 COVID related layoffs helped provide some housing to those that need them.

As they say, be careful what you wish for.

[SoumenD]

What Pichai said publicly is something very usual that’s discussed within closed doors before every layoff cycle. Market is under pressure post the war broke and share prices are lower resulting in not so great quarterly results. So what do companies do in such cases as a short term remedy? Layoffs. Keeps investors happy as they see costs being reduced and the scoreboard (stock prices) ticking. Nothing surprising here really

Originally Posted by Samurai

We all know TCS/Infy keep 10s of thousands of employees on bench for months together. Do we hear them blaming the employees?

They don’t because bench strength is one of their USPs while bagging projects. Its a mandatory pre-requisite for a ITeS firm. If not for bench strength how else will they get 100s of resources instantly if the sales team cracks a big project? And its not like service based firms don’t fire bench employees. In comes a recession & near future pipeline dries up a bit, these bench-folks are the most vulnerable lot susceptible to layoffs. Been there, seen it first hand.

Originally Posted by apachelongbow

A round of layoffs will help cool down this optimistic scenario of never ending grow and most people will be cautious instead of investing money in say real estate. That may well provide some affordable housing to those that need them.

Having seen 2008 & 2020(not as big as former) recession based layoffs can assure you, what you wish for isn’t going to happen. There was insane layoffs in ITeS sector( back in 2008/09 recession) but didn’t stop RE’s upward tick and its still going on. Builder lobby is very strong and they are happy sitting over unsold inventory than reduce/rationalise prices. At best the price increase speed will reduce a bit for a few months or a year. IT layoff won’t make much of a difference.