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Article by Mohan Babu

Think positive, prepare for the next wave...

An IT professional should note that globally, prudent IT houses are using the US slowdown to recruit good talent and are working on their game plan to stay ahead of the curve, says Mohan Babu

The US economy is slowing down and you must be kidding yourself if you think that as a “super duper” programmer, you can be immune to the effects of recession. I am no economist and will not pretend to be one. However, the facts are out there for all to see, courtesy the Web

Sitting in Colorado, I tend to receive emails from friends and associates from all over the world. Nothing new there except that during the past few weeks most of the mails I received have a common thread - the state of the US economy. Some of the most common questions include “What do you think of the economy?” or “Should Indians be thinking of moving out of US?” or “Should I decline the offer to move to the US?”

To be quite honest, it is hard to give a definitive answer to any of these questions, especially if one is sitting right in the eye of the storm. Every day some news article or radio talk-show host preaches about the slowdown in the economy. The government and Federal Reserve Bank are (as expected) taking a cautious approach studying every minute fact and figure, lowering interest in a gradual manner. However, one thing is certain, the economy (and job-market) is not as strong as it was even a few months ago.

The impact of “slowdown in economy” hit home recently when I returned to work after a month-long vacation. Two of my colleagues had been “laid off”. A week after that, managers in our division had the ominous task of going around telling another, much larger group of individuals that it was their last day with the company. The day after that, walking around the empty cubicles in the office, it hit me - Corporate America can be really brutal. “Here today, gone tomorrow”, as many of us are learning, literally means what the expression implies.

Cutting through the clutter, the facts the US economy is slowing down and you must be kidding yourself if you think that as a “super duper” programmer, you can be immune to the effects of recession. I am no economist and will not pretend to be one. However, the facts are out there for all to see, courtesy the Web. The official White House homepage on the web ( lists some of the key economic indicators.

  • Housing - the growth for November was 3 per cent and for December the growth was 0 per cent (no growth!).
  • Unemployment Rate - Number of persons unemployed as a percent of the civilian labour force, seasonally adjusted. The figure for December was 4.0 and for January 2001, it moved up to 4.2.
  • Productivity - Output per hour of all persons in non-farm business sector. Decreased from 3.0 in the third quarter of 2000 to 2.4 during the fourth quarter of the year.
  • Consumer Confidence - a mix of various factors including housing starts, rental sales, industrial production and capacity utilisation show an overall trend that is not very optimistic about the near-term future.

What all these facts and figures translate to is the US economy is slowing down. US based IT companies, who, until only about six months ago were clamouring for foreign workers (read H1 holders) have not used even half of their quota for the year.

It is ironic that the same technology giants Cisco, Intel, Nortel, Motorola, Compaq who were market leaders until a few months ago are also leading the pack, this time in the excruciating task of laying off their employees. Each of them has recently announced a cut of over 6,000 personnel.

As an IT professional in India, reading this article, you are probably wondering if it is time to bite the bullet and take the “offer” being doled out by the friendly neighbourhood body-shopper. My two cents of advice would be to take a deep breath and think, how long has it been since he (the headhunter) called you about the “US offer”? If it has been more than a few months, you probably will not hear from him in a hurry. Body-shoppers, especially the smaller ones without an established client base are feeling the pinch more. The people they helped “place” when the going was good are coming on bench faster than anticipated.

Before you get into bouts of depression and moan about the opportunities that could have been, just look at the positive side:

  • Indian IT and the global opportunities afforded by large IT houses are here to stay.
  • If anything, prudent IT houses are using this opportunity to recruit good talent and are working on their game-plan to stay ahead of the curve.
  • Countries and companies are still vying for talented professionals and the trend, as far as one can see, is only going to continue.

Any economist will tell you that an “economic cycle” is basically a predictable long-term pattern of alternating periods of economic growth (recovery) and decline (recession). An economic cycle is a fact of life in the corporate world and this is probably a lesson for many an IT professional who only saw the growth side of the curve. If anything, it is a lesson in the basics of business that every professional - including IT professionals - need to be aware of. No one is immune to the swings in the economy. Just as a “growing economy” can propel one by providing opportunities, a “slowing economy” can provide one with an opportunity to look at the big picture and plan for the long haul and prepare oneself for the next wave.

The bottom line is that companies in the US are still buoyant about the future. The question they are asking is “when” the economy will turn towards the growth side of the cycle and not “if”. When the economy turns around soon, we Indian IT professionals are going to be there. Until then, sit-back, relax and enjoy the ride.





About the Author

  • A Bio and profile of the author, Mohan Babu, can be found at his homepage
  • Mohan has authored a book on Offshoring and Outsourcing (Publisher McGraw Hill, India), a link to which can be found here
  • Mohan has also authored an Online book on "Life in the US," available for free download.
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    For FAQ, Trivia and Information on Life in America, visit the Ask-A-Desi section

    ©Mohan Babu: All Rights Reserved 2005

    Mohan Babu is an international consultant trying to find the ‘sweet spot’ where IT meets business. E-mail: mohan He is also the author of a recent book on "Offshoring IT Services"

    All rights are reserved. Mohan Babu ("Author") hereby grants permission to use, copy and distribute this document for any NON-PROFIT purpose, provided that the article is used in its complete, UNMODIFIED form including both the above Copyright notice and this permission notice. Reproducing this article by any means, including (but not limited to) printing, copying existing prints, or publishing by electronic or other means, implies full agreement to the above non-profit-use clause. Exceptions to the above, such as including the article in a compendium to be sold for profit, are permitted only by EXPLICIT PRIOR WRITTEN CONSENT of Mohan Babu. 

    Disclaimer: This document represents the personal opinions of the Author, and does not necessarily represent the opinion of the Author's employer, nor anyone other than the Author. This Article was originally published in Express Computers


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