The 'paisa vasool' model of Indian IT firms must adapt to change

livemint.com:

₹2.5-3 lakh per annum (or $4,500-6,500 at then prevailing exchange rates). Apart from some exceptions, it appears as if the hiring of fresh engineering talent at the same low salaries as two decades ago is an exploitative tactic that is still used by the country’s IT majors. Accounting for inflation, this means that engineers graduating today are only making a fraction of what their seniors did 20 years ago! The only exception was the sudden surge during the pandemic, which pushed global clients to outsource more of their operations in a bid to keep down costs.

This surge in offshore demand forced the usually stingy Indian IT majors to pay large premia to poach people from one another. But now that things are ‘back to normal,’ the ‘paisa vasool’ aspect is at play again. Witness Wipro Ltd’s move earlier this year.

On 21 February 2023, India Today reported that the company rolled back its commitment—by almost 50%—on the salaries it was willing to pay fresh engineering graduates (bit.ly/3SHqfgD). The article read as follows: “In an email, the company asked the freshers to settle for almost 50 percent less salary than what Wipro was offering initially. Salaries were slashed to ₹3.5 lakh from the earlier ₹6.5 lakh.

While the tech firm has blamed bad macro environment for changes in its decision, it has also asserted that freshers are at least getting an opportunity to build their expertise and learn better." “At least getting an opportunity"? I don’t know if this was the exact statement, but if so, it beggars belief. According to industry sage T.V. Mohandas Pai, who was interviewed by CNN News 18 when news broke on this topic, this is “very wrong" (bit.ly/3MDBvXq).