Hyderabad's IT base crumbling - TeluguPeople.com News

HYDERABAD: As the Telangana agitation drags on and on, Hyderabad' the bone of contention between the people on both sides of the divide' is slowly but surely losing its sheen and, maybe, its significance too.

Once considered the most favoured destination for IT firms which created approximately 50,000 direct jobs during the pre-recession period of 2007-08, additional job creation has dwindled to a paltry 15,000 during 2010-11. And, more alarming is the fact that IT and ITES companies are opting for alternative locations such as Bangalore and Chennai to scale up their operations.

A case in point is Wells Fargo, the fourth-largest bank in the US by assets, which has set up a captive centre in Bangalore early this year. The company first started India operations in Hyderabad way back in 2006 and more than 90 per cent of its 2,000-odd workforce is based here.

'Setting up a captive centre in Bangalore was one of our de-risking efforts to ensure business continuity in case of an unforeseen agitations and frequent bandhs,' said a senior official.

Similarly, some of the mid-size companies like Patni, acquired by iGate, have surrendered government land recently citing inability to expand due to internal issues.

Twelve more companies, including TCS, Infosys and Cognizant, are yet to fulfil their hiring commitments given to the government at the time of land allocation.

'We have issued notices to about a dozen companies. This is a routine protocol for us. Some companies are willing to hire but there are issues pertaining to land and it will take time for them to commence hiring employees,' a senior government official said.

According to him, IT & ITES companies occupied approximately 6 million sft in and around Hyderabad just last year. Going by the industry norm of one job for every 100 sft, over 60,000 professionals were to be hired in 2010-11. But the official figure stands at 15,000.

'Companies book space first and expand gradually. Low hiring should not be a concern as the industry world over is under pressure due to macro-economic conditions,' said P Venugopal, director of STPI - Hyderabad.

Incidentally, hiring from the student pool of state-run Jawaharlal Knowledge Centres too has reduced drastically. If 33 companies hired 2,030 freshers in 2009-10, only 10 companies turned up to conduct recruitments and hired 1,370 during 2010-11.

The IT sector currently employs nearly 2.7 lakh software professionals in the state. Interestingly, in the last six months, over 4 million sft space has been booked but it remains to be seen if that translates into 40,000 additional jobs.