IT Companies will cut wages to tackle rising Rupee

he depreciating dollar and a rising rupee may have suddenly put pressure on Indian IT players, as labour arbitrage does not look very attractive anymore. So is India’s strength as a low cost IT destination taking a beating? Not really, as IT majors have now managed to cut down wage cost to half in the third quarter ending December 2007. This, inspite of a 15% increase in hires.

Infosys, for example, the IT company along with its subsidiaries, doubled its intake to 11,683 as compared to last year. Their staff strength as on December 31, was 88,601. However, wage bills went up by only 21% in this quarter compared to a jump of 43% in the same period last year. Similarly, TCS, one of the biggest IT employers in India, reported a decline in its personnel cost by 4%.

Wipro too recorded a slowdown in the increment of its employee compensation cost to 29%, down from 46% during the same period last year.

Source : TOI