Ramco Systems cuts 15% jobs due to US slowdown

The slowdown in the US economy has forced Chennai-based IT solutions provider Ramco Systems to axe 200 jobs between May and June this year or nearly a 15 per cent cut in its workforce. With the cut, Ramco is now left with only 1,200 people across the country.

Employees with experience of two years and above, who were unable to meet the performance requirements of the company, were asked to leave. Even though the average age of the professionals has increased marginally to 28.1 years (from 27.5 years), but the lack of experience poses challenges at the middle management level, said Ramco Systems’ Chief Operating Officer, Kamesh Ramamoorthy.

Ramamoorthy said, “Market conditions are very tough, leading to delays in getting the contracts. If the underperformers do not improve even after extra training then there will be parting of ways. Senior employees who were relieved have been given compensatory benefits for their service.”

Professionals with less than five years work experience at present form 70 per cent of the 1.6 million strong Indian software work force.

Only 20 per cent of these professionals have an experience of 5-10 years and less than 1 in 10 professionals have over ten years of experience. It is generally expected that with the on-campus recruitment of thousands of freshers, the average salaries should go down. Sanjiv Kataria, senior analyst with IDC India, said,” The companies are bullish of the future and therefore there is a general consensus to conserve cash. However, this is just a short term settlement and companies would ramp up as time passes.”

Other large software companies in India who have resorted to issuing pink slips to cut down on extra staff in the last few months are TCS (500 plus), Wipro (725), Patni Computers (108), Hexaware Technologies (329) and Syntel (48), and Adventity (200 plus). Commenting on the situation, Sourabh Kaushal, principal consultant, Frost & Sullivan said,” The companies are hiring people in large numbers and the non-performers being taken off are negligible. But compared to last year the number of the new recruits has reduced.”

Leading HR services company, Ma Foi had in fact in its recent review of annual employment generation in India in various sectors had revised growth in hiring in IT sector to come down to 6 per cent against the year beginning projection of 7.31 per cent.