Nasscom Reaction To Barack Obama's Remarks on Outsourcing

: Indian IT industry body Nasscom has reacted cautiously to US President Barack Obama's remarks on outsourcing, saying global outsourcing had benefited US firms that generate over 50 per cent of their business overseas. 

"American companies generate more than 50 per cent of their business outside the US. Their workforce is global. To be globally competitive, they also depend on globally shared services," Nasscom president Som Mittal said on phone from the US. 

Welcoming Obama's observations on protectionism, Mittal said late Wednesday that the US president's statement would have a positive effect on his country's economy that is going through a recession after a long time. 

"Obama has, in fact, supported the need to avoid protectionism. We have to see how he would prevent job losses without resorting to protectionist measures," Mittal pointed out. 

Citing the latest US state department data on employment, Mittal said job losses in construction, retail and manufacturing were more than in services, especially in the IT space. 

"Compared to other sectors, job losses in the US tech sector were 2.2 per cent as against the overall unemployment rate of 7.2 per cent. The US administration will not do anything that would harm its industry or economy, which is driven by the technology leadership its companies enjoy," Mittal noted. 

Asked what impact Obama's statement on outsourcing would have on the Indian IT and BPO (business process outsourcing) industry, which has been reeling under global recession and financial meltdown in the US, Mittal said he had not seen any specific proposal to the contrary. 

"We have not seen any specific proposals to the contrary. The people here (in the US) are more concerned about healthcare, energy, saving jobs and economic recovery than outsourcing, on which Obama used only nine words," said Mittal. 

Job Lost Due To Recession

NEW DELHI: Five lakh people were rendered jobless between October to December 2008 due to the recession, according to the latest government 

Job-cuts: A blessing Coming to terms with lay-off Keep it light at workplace!study. 

The findings are part of a first of its kind survey conducted by the Labour Bureau of ministry of Labour and Employment as part of a study on the effect of economic slowdown on employment in India. 

A sample size of 2581 units covering 20 centres across 11 states was taken up for the survey. Eight major sectors like textile and garment industry, metals and metal products, Information Technology and BPO, automobiles, gems & jewellery, transportation, construction and mining industries were also included in the survey. 

The total employment in all these sectors had come down from 16.2 million in September 2008 to 15.7 million by December 2008. 

Exporting units had observed a higher decline in employment with gems & jewellery sector shedding 8.43 per cent of its work force. This is followed by metals and textile sector which laid off 2.6 per cent and 1.29 per cent of their work force respectively. 

Among the domestic sector units, gems & jewellery sector again witnessed the maximum decline in employment with 11.9 per cent of their work force losing jobs. 

This was followed by automobiles and transport sectors who shed 4.79 per cent and 4.03 per cent of their work force. 

The study also found that the overall decline in contract workers was observed to be 3.88 percent during the period in comparison to only 0.63 per cent decline for direct employees. 

Contradicting popular belief that the IT and BPO sector during the same period had seen retrenchment the sector had infact increased its employment marginally by 0.33 per cent. 

The government, which has so far said that the economic slowdown would have very little impact on the economy other than on parts of the financial system linked to the United States, now agrees with findings of international studies which suggested that developing economies will be impacted by the recession. 

"The global slowdown has its implications on the domestic economy...Ministry of Labour and Employment also took a serious note of the economic slowdown and it felt the need to have an assessment of its impact on employment to enable the government to take preventive and ameliorative measures to arrest the decelerating employment in the country," Ministry of Labour and Employment Secretary Sudha Pilla said. 

All eight industry sectors had experienced an average decline in earnings by 3.45 per cent during October to December 2008. Overall capacity utilization had reduced by 1.32 per cent per month during the period, with automobile sector witnessing a monthly decline of 7.05 per cent.