Karnataka IT exports to fall 5% this fiscal: Official

The global meltdown is set to pull down Karnataka's IT exports by five per cent in the current financial year, but state officials dismiss talk of large-scale layoffs in the sector.

"We expect four to five per cent fall in exports for the year (2008-09) compared to last year," Karnataka's IT Secretary Ashok Kumar C Manoli told PTI here.

In 2007-08, the state's IT exports, driven by companies such as Infosys and Wipro, totalled Rs 56,500 crore. Karnataka accounts for one-third of the country's total IT exports.

Voice-based business process outsourcing (BPO) companies, in particular, who depend on outsourcing, have come under strain in Karnataka. There is apprehension over what would happen to 150,000-200,000 BPO employees working in various firms.

"SMEs in the IT sector are finding it difficult to survive in the present situation," Manoli said.

He said many of the big IT companies were engaged in cost-cutting exercise in the last few months and employees are taking additional workload, while recruitment of new staff has been delayed.

"Instead of laying off (staff), the system of giving more work per head, per vertical is being tried," Manoli said.

"Large-scale layoffs are not there. There appears to be no layoff. There is no reference to us from any of the company's employees that there has been a layoff. There is more work, more cost reduction," he added.

Meanwhile, he also said that software technology parks were planned to be opened in Gulbarga and Belgaum in the coming financial year.

"Rural BPO projects are also taking off for the first time," Manoli said. "Rural BPOs will be started in places where the population is less than one lakh."