Many Information Technology companies are calling layoff. As per the trend this sector will see around 2 lakh annual dismissal in the years to come. The reasons could be many small issues accumulating to be huge enough to hand over the pink slip to employees. Some feel it is due to automation, higher salary expectations, protectionist policy of U.S and U.K and so on.
I am not going into the details of the cause of lay off, in a way it has helped economy of my country. These are my analyses and if we know them, I think they can say that lay off can be good if not better.
Since the year 2000 the Information Technology has been one of the job generator in my country. It kicked off very well and the starting pay for an engineer without experience is around Rs.2 Lakh and about Rs.15 Lakh for those who have put in ten years of experience. Over 50 lakh employees aged between 25 to 40 years earn anywhere between 20 Lakhs to 2 Crores per annum depending on the company, experience and luck. With such huge salary they are able to set aside heavy savings to make down payments for property purchase. This is happening in all IT hubs but if I have to talk only on my city Bengaluru, the Real Estate czars have the Software Engineers in their soft gloves. There was a huge demand for mid-segment residential properties across Bengaluru as the real estate dealers tapped the IT employees as their clientele.
These Techies who have nil experience of haggling in buying groceries or veggies lined up to purchase the residential properties resulting in superfluous boom in real estate market. Bengaluru began to grow and it also resulted in the outsiders from other states to pour in. The infrastructure development became a priority and the cost of living also shot up. One has to agree that the dream of owning a house for a domicile resident was vanquished by these IT sectors. As per a report the IT population in Bengaluru is around 3 lakh. They contribute to the biggest buyer category of 45 percent of the total project launches in the last 5 years. They have unknowingly widened the rich poor parity.
I remember a saying in Kannada “Haasige Iddashtu Kaalu Chaachu” (Stretch your legs only as much as the cot allows you to). This saying highlights the importance of spending only within the capability. Even the vendors on the street of Bengaluru preferred to have IT sector employees as their customers. Those who bargain with them are categories as low-end customers and they automatically become the second line clientele.
Why do I say this lay off is good???
Understandably it is hard for those who had lived life in royal comforts to accept the lay off as they have their own commitments. Also there are many industries like caterers, tour operators and travel agency which depend on the IT sector. With the serious threat of lay off, there is a possibility that the real estate sector which is yet to recover from the demonetization drive will collapse. Experts say the insecurity in the sector has pushed those prospective property buyers to think twice before investing further. Even if that prediction does not point out to real estate lull, the central government conviction to provide affordable housing with lower interest rates may push the sales of residential properties down. With the lay off or with the central government conviction the hype created by the real estate sector will be in check and the land price will not zoom up unnecessary.