Hyderabad’s IT industry has been hard hit by the global economic slowdown and especially the financial chaos in the US. As per published media reports, pint slips have already been handed out to hundreds of IT professionals and a large number has received warnings.

Top companies who have presence in Hyderabad, like Satyam and Wipro, are also reportedly asking their employees to quit, saying they are not required anymore. Add to this the announcement that at least 80% of the workforce should not expect hikes this year. This at a time when the inflation rate is hovering at around 12%.

“Companies are not getting enough projects and the crisis in the US has forced them to downsize and tighten their fists further,” said a senior management official of Infotech Enterprises.

The companies that have been most affected are those offering services to financial institutions. “A majority of US-based financial institutions outsource work and Hyderabad’s IT industry is a major beneficiary. The slump there has really hit the companies here very hard,” a manager in Satyam said after the IT major issued pink slips to at least 140 employees and put at least 400 engineers on a performance improvement plan with a warning that if they fail, they have to quit.

“They have given us ‘dummy projects’ and if we don't prove our worth, we are out,” said Debashish, a software engineer who sat on the bench for six months. However, Satyam spokesperson Archana Muthappa denied that the warnings were on account of the economic downturn. “This is a regular practice. Every year, after appraisals, we put some employees in the performance improvement programme if their work is not up to the mark,” she said.

Companies that are into providing technical and engineering services are faring better as they are still getting highly paid projects. Engineers who are already on long-term projects are also a little more secure, but for thousands of IT professionals with two years or less experience, the dread of that final email or pink slip is a reality.