18 AUG, 2010, 02.00AM IST,TNN

IBM is India's second largest pvt sector employer

BANGALORE: Tata Consultancy Services is the largest private sector employer in the country. It had 1,63,700 employees as on June 30. But guess who's number 2?

The honour goes to -- surprise, surprise -- IBM. That's right. Not to any Tata or Ambani company, or to Infosys or Wipro.

The fact that IBM has over one lakh people on its rolls in this country is one of India Inc's best-kept secrets. No one in US-headquartered IBM will admit that it employs such a large number of people in India -- for fear of a backlash at home. There's been rising anger in the US over the transfer of `American jobs' to lower cost havens, particularly India. Faced with an economic slowdown and a politically-damaging high employement rate, Barack Obama himself has begun to sound jingoistic. He has issued barely-veiled threats against US companies that ship out work and promised candies to those who stay patriotic.

Even as an IBM spokesperson declined comment when contacted, a source within the company said that in a couple of years, the India employee strength could cross that in the US, where it employs about 1,55,000 people, and where the pace of hiring is substantially slower than in India. IBM globally has a little over 4,00,000 employees. So, close to 1 in 3 of its employees is already an Indian.

Its staff strength is more than four times that of India's biggest private sector company, Reliance Industries, which employs about 23,000 people. It is bigger than the combined employee base of the two Tata Group's crown jewels, Tata Steel (81,000) and Tata Motors (24,000).

A cross-section of industry analysts and manpower recruitment firms TOI spoke with not only put IBM's India workforce (including that of its wholly-owned subsidiary IBM Daksh) at over one lakh, some even went to the extent of saying it might be 1.3 lakh -- well over Infosys' 1.14 lakh as on June 30. Infosys is India's second largest IT firm by revenue and third, it now transpires, by employees.

Since 2007, the company has stopped disclosing the geographic break-up of its employee numbers. The last time it provided figures was in 2007, when it said it had 73,000 employees in India. Since then, the company has maintained that it's a global company and geographic numbers do not have any meaning in that context.

IT services firms have emerged as India's biggest job generators, even as traditional manufacturing firms -- historically big employers -- have tended to cut down on numbers to control costs. Typically, this sector also generates high paying, high disposable income jobs, unlike manufacturing.

It's well known that IBM has been hiring aggressively in India. The 2007 figure of 73,000 was a near 40% increase over the 2006 figure of 53,000. Since then, big IT companies have been hiring upwards of 20,000 people a year.

"Even during the recession years of 2008/2009, it was mostly IBM, along with Accenture, that kept the lights on in the hiring market," says a headhunter. In an environment where the pressure to cut/control cost is brutal, hiring people at relatively higher salaries has become a luxury few can afford.

Some said that IBM Daksh (the BPO unit) alone employs about 50,000 people in India. IBM Global Services --- which straddles hardware (telecom, retail billing, mainframe, servers, etc) and software sales, services and support business, consulting business --- and IBM Labs are together seen to employ another 70,000 to 80,000 people.

The hiring aggression is continuing. TOI reported last month that IBM will take up close to 1.25 million sqft of office space this financial year, for which it has signed leasing deals with multiple developers. Real estate consultants said the company's plan is to absorb 3 million sq ft across IT hubs like Bangalore, Pune and Hyderabad over the next three years.

source: https://economictimes.indiatimes.com/infotech/ites/IBM-is-Indias-second-largest-pvt-sector-employer/articleshow/6327859.cms

Thinking clearly about inflation

The subject of inflation, which occupied the media and the politicians in 2008 until the global financial crisis put an abrupt end to it, has returned to the centre stage of the policy debate. The big difference, however, is that this time around the government has been much calmer.

Previously, the increase in the year-on-year wholesale price index (WPI) to 8% in April 2008 from 4.5% in January 2008 had the government reach out to every conceivable weapon in its arsenal regardless of its suitability for combating inflation. The government’s actions included cuts in import duties, bans on exports, appreciation of the rupee, rise in the cash reserve ratio, suspension of the futures trade, cuts in excise duties, export taxes and threats of price controls.

In the current bout, the WPI inflation has been higher and the reaction of the opposition parties much fiercer. Yet, delightfully, the government has refused to panic. It has firmly carried out the deregulation of petrol prices and, in large part, confined the policy action to monetary instruments.

Most importantly, the government has shown great sensitivity to possible adverse impact of overly aggressive actions against inflation on growth, which is so essential to poverty alleviation. The ruckus in the Lok Sabha notwithstanding, finance minister Pranab Mukherjee has boldly stated that excessive hikes in the interest rates would lead to “no investment, growth or job creation.”

Because inflation can cut both ways even from growth perspective, it often poses a dilemma for the policymaker. Undue tightening of monetary policy to contain inflation may choke off investment and therefore growth. At the same time, excessively high inflation rates, which result in highly negative real interest rates, may be detrimental to savings and hence growth.

They may also make the relative price signals noisy and distort the allocation of investment. Luckily, so far, the annual increases in the WPI of all commodities, shown in the accompanying chart, give us no reason to panic. While inflation began to accelerate in February 2010, taking 2009-10 as a whole, the inflation rate has been just 3.8%.

Admittedly, WPI inflation from February to June 2010 has been in the 10-11% range. But inflation at these rates is scarcely unprecedented. Similar rates had been experienced not just on monthly but annual basis in the first half of the 1990s.

Moreover, the current high rates are largely reflective of low rates in the corresponding months in the previous year. Ultra-low monthly inflation rates of –1 .0 to 3.5% between February and October 2009 left the base over which the inflation rates for the months of February to October 2010 are calculated low. This fact implies that monthly year-on-year inflation rates will remain high until October 2010.

While the measured response of the government to overall inflation is, thus, to be admired, its performance with respect to food-price inflation cannot escape criticism. At 14.7% in 2009-10, wholesale price inflation in food articles has been much higher than the WPI inflation for all commodities. Recent monthly data yield even higher rates: between December 2009 and June 2010, monthly food inflation ranged from 14.6 to 20%.