The American impact on Indian companies
The bankruptcy of two American giant financial enterprises is going to have strong negative impact on aleady wounded Indian job market as well as financial sector. The worst victims in this financial tsunami will be management professionals.
Conditions in America
The disappearance of major investment banks Lehman Brothers, AIG and Merrill Lynch strongly hitting the Ameican work force already a lot INCs have got rid of more than one lakh professionals to overcome financial squeeze. If what is reported is going to be true more than two lakhs people have to search for new jobs as Lehmon brothers alone show door for 26,000 and the indirect effect of the disaster is going to have on more than one lakh.
The impact on India
The aftershocks of Lehman Brothers-Merrill Lynch are reverberating across the Indian Institutes of management institutions as they are some of the largest recruiters from these institutions. Lehman Brothers has been recruiting from IIM-Ahmadabad since 1997 and in the past few years, been picking 12 people on an average every year in March 2008 alone Lehman Brothers recruited 10 students from IIM-A.
The news of Lehman Brothers going bust has kicked fuelled apprehension among students at IIM Calcutta, especially because Lehman Brothers is considered one of the top recruiters there, both for pre-placement offers and final placements. This year, it has already made pre-placement offers to at least 10 students and the letters have just reached them
In the summer placements of IIM, Bangalore, for class 2009, investment banking accounted for 68% in the internship profile of the students, while 17% opted for management consultancy. Lehman Brothers was the major recruiter, selecting 13 students, while JP Morgan and Macquarie took the second position by recruiting 11 students each.
India front office and nearly 2,500 employees of its captive units will have to look for alternate employment. Search firms across India expect the ripple effect to be felt across sectors, with IT/ITES companies which depend heavily on the banking and financial services industry likely to be directly hit. According to market guesstimates, as many as 25,000 jobs could be lost in India. There are fears that IT majors may announce huge layoffs over the next few quarters.
Though the Wall Street is not the only job source for the management professions but it has the ability to offer the highest salaries. Now these recruitments will abruptly come to an end.
As one financial expert commented the golden years of the financial services industry are over and they have to brace up for worst crisis.