Hyderabad's IT industry has been hit by the economic slowdown across the world and the financial crisis in the US. As a result, hundreds of IT professionals have either already lost their jobs or have been issued warnings.

Even top companies like Satyam and Wipro are politely asking their employees to quit or are curtly handing out pink slips, saying they are not required anymore. It is a blow for at least 80 per cent of the IT professionals working here who were told only last month that they should not expect hikes this year.

“Companies are not getting enough projects and the crisis in the US has forced them to downsize and tighten their fists further,” said a senior management official of Infotech Enterprises.

Particularly affected are companies offering services to financial institutions. “A majority of US-based financial institutions outsource work and Hyderabad’s IT industry is a major beneficiary. The slump there has really hit the companies here very hard,” a manager in Satyam said after the IT major issued pink slips to at least 140 employees and put at least 400 engineers on a performance improvement plan with a warning that if they fail, they have to quit.

“They have given us ‘dummy projects’ and if we don't prove our worth, we are out,” said Debashish, a software engineer who sat on the bench for six months,.

However, Satyam spokesperson Archana Muthappa denied that the warnings were on account of the economic downturn. “Every year, after appraisals, we put some employees in the performance improvement programme if their work is not up to the mark. If they are through it, they don't have to worry,” she said.

Adds Satyam Computer Services Ltd's global head of HR, S V Krishnan: “As part of our appraisal process, we identify around 5 per cent of our associates in the ‘performance improvement’ category and put them through a structured programme. Our experience reflects that about half of this group exits the system either voluntarily or involuntarily, while the others make credible progress internally. We concluded our appraisal process a few weeks back and believe we are witnessing similar trends like in the past.”

The talk at the hi-tech city and IT hub Madhapur these days is only about the sword that is hanging over the heads of thousands of engineers. “We are on the bench right now because there is no work. But our company is keeping us in reserve in case a major project requiring a big team lands suddenly. Any day, we may be asked to pack our bags,” says Vamsi Krishna, furiously puffing away. “We are already looking out for jobs, but the situation is the same everywhere.”

Companies that are into providing technical and engineering services are faring better as they are still getting highly paid projects. Engineers who are already on long-term projects are also a little more secure, but for thousands of IT professionals with two years or less experience, the dread of that final email or pink slip is a reality.

“Whether it is Wipro, TCS, Patni, Virtusa or Satyam, IT professionals are all under stress and scared that they will be asked to leave any minute,” informs Satish Reddy, who went to Bangalore over the weekend to look for a job.