Dollar plunge, No salary rise

IT companies, faced with a free falling dollar and receding bottom lines, are cutting wages of their staff, reducing increments and freezing recruitment. They are also forcing techies to work for more hours so that every dollar they earn is worth it. Industry analysts say Indian software companies, labeled globally as cyber sweat shops, spend up to 45 per cent of their dollar earnings on staff salaries.

And every dollar counts at a time when the greenback has plunged to an all-time low of Rs 39.39. Of course, the latest developments have been worrying those techies who earn part-dollar wages. Analysts say industry wage hike that has averaged 25 per cent in the past is likely to fall to 10 to 15 per cent this year. Also, some companies have started slowing down on recruitment although retrenchments look unlikely in the near future.

Mr E. Manoj Kumar, director of Software Technology Parks of India Hyderabad, feels the rupee appreciation has mostly affected Indian companies exporting to the US. The scenario is not at all rosy in small and medium scale IT firms that work on thin margins and whose profits have started dipping drastically. And this has their employees worried.