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The Indian IT and ITeS sector is unlikely to be affected by a slowdown in the US market, IT industry body NASSCOM on Friday said. “Though the slowdown might affect the industry in the short-term, but in the long run the Indian IT and BPO sector will continue to maintain healthy growth rate,” NASSCOM President Som Mittal told reporters.

India’s outsourcing industry is grappling with an appreciating rupee and the sluggishness may remain for another four-to-six months, he said. However, the sector expects to meet or even exceed its software export target of 60 billion dollars and overall software and services revenue goal of $73-75 billion by 2010, he added.

“The financial turmoil in the US and elsewhere could drive businesses to farm out more work to cheaper Indian firms,” newly elected Vice-Chairman of NASSCOM Pramod Bhasin said.

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US Electronics giant Advanced Micro Devices (AMD), which also has offices in India, announced on Tuesday that it will cut 10 per cent of its global payroll or over 1,600 jobs, because of deteriorating business conditions.

AMD, the second largest American chipmaker which has been facing problems largely because of a resurgent Intel, will begin reducing its workforce this month and the process is expected to be completed by the end of September. AMD expects to report revenue of USD 1.5 billion, down 15 per cent from the last quarter. AMD said that the revenue drop was caused by lower-than-expected sales across all business segments. The decline was more than expected.

However, details regarding the locations of job-cuts by the company, which has offices at Mumbai, Bangalore and New Delhi, were not given.

The reduction will be “global and will span all groups and all levels within the company and be based on business needs,” AMD spokesman Drew Prairie said.

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US employers became jittery by talks of recession and slashed 80,000 jobs in March, the most in five years and the third straight month of losses. At the same time, the national unemployment rate in US rose from 4.8 per cent to 5.1 per cent (the highest in 2 1/2 years), the clearest signal yet that the economy might already be shrinking.

Job losses were widespread in March. Construction, manufacturing, retailing, financial services and various business services all racked up losses. That overwhelmed gains elsewhere, including in education and health care, leisure and hospitality as well as in government. The economy is suffering the effects of a housing collapse, a credit crunch and a financial system in turmoil. Continue Reading»

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