Financial crisis that has taken the world by storm had been in the making for some years now. It is ironical how the entire financial mechanism all over the world was unable to detect the looming threat at the right time. Add to this economic tragedy the ill effects of terrorism and the final mixture looks potent enough to blow us all.
It is now a known fact that 2009 is the worst year to past out of a B-school in India. Financial sector which accounted for roughly about 20% of B-school placements last year has seen business plummet to record lows. Although none of the Indian financial giants have gone bankrupt at the time of publishing this post but their fortunes have been severely affected by the current financial mess. The international Ivy League investment banks like Lehman brothers which to some extent were responsible for driving B-school salaries sky high have gone bankrupt. Many Indian Financial giants have already freezed fresh hirings and are currently revisiting their business strategies.
IT-ITes is another bread butter sector for the Indian B-schools. Rising IT exports had resulted in IT companies also absorbing about 20% graduates last year from the top rung B-schools in India. Rupee depreciation has affected the IT sector more than its appreciation did last year. Add to that the effects of the current economic mess, and the placement picture gets gloomier.
All sectors are interlinked and when the economy is in mess, only few sectors can look up. Automobile companies in India are already feeling the Pinch. Tata motors & Ashok Leyland have laid off thousands of temporary workers (Tata alone laid off about 4000 workers), closed their plants for short intervals to get rid of the excess inventory & Mahindra Automobiles reported a decrease of more than 40 % in profits . Tourism and hospitality are also down as people can’t spend if they don’t earn. Realty sector is the worst affected of all. Unitech in its bid to get over the current liquidity crisis and meet its financial obligations sold a stake in its telecom unit to Telenor of Norway, laid off hundreds of employees and is now planning to sell off a stake in the hotel chain it was developing. DLF, Omaxe and Prasvanath have also either laid off employees or resorted to huge salary cuts to tide over the crisis. Everyone is aware of the aviation sector mess and I don’t intend to elaborate further.
Now add to a already gloomy placement season, the effects of the terrorist attack on Mumbai. If investors can’t travel to India because of security reasons, will they invest in India? Will any investor put his money in a project, the security of which can’t be guaranteed by the local government? Experts say that the terrorist activities won’t affect the Indian economy in the long run but effects will be seen in the short run. So what future holds for the B-school batch passing out this year?
A prominent B-school in Gurgaon has opted for a roll-on final placement process this year as opposed to a week. A roll-on final placement process was completely unheard of till now among the top B-schools in India. Another famous B-school in Mumbai with an international campus has opted for two placement weeks against the usual one. The same applies to another famous B-school in Pune with affiliation to a prestigious group of Institutes. Another well known B-school in Ahmedabad which held its final placement week last month failed to place around 50% of its batch. The school has now opted for a roll-on process. All this was before the Mumbai Terrorist attacks, the effects of the attacks are yet to be seen on placements. According to some estimates, atleast 10-15% premier B-school pass outs of last year are either unemployed or being considered to be laid off. Companies which hired in bulk last year are non-committal about visiting campuses this year. Some companies have resorted to hiring only from their summer interns while many have completely freezed new recruitment.
However not everything is gloomy for students and companies. The positives and what students can do to tide over the current employment crisis will be discussed in the subsequent post.
It is now a known fact that 2009 is the worst year to past out of a B-school in India. Financial sector which accounted for roughly about 20% of B-school placements last year has seen business plummet to record lows. Although none of the Indian financial giants have gone bankrupt at the time of publishing this post but their fortunes have been severely affected by the current financial mess. The international Ivy League investment banks like Lehman brothers which to some extent were responsible for driving B-school salaries sky high have gone bankrupt. Many Indian Financial giants have already freezed fresh hirings and are currently revisiting their business strategies.
IT-ITes is another bread butter sector for the Indian B-schools. Rising IT exports had resulted in IT companies also absorbing about 20% graduates last year from the top rung B-schools in India. Rupee depreciation has affected the IT sector more than its appreciation did last year. Add to that the effects of the current economic mess, and the placement picture gets gloomier.
All sectors are interlinked and when the economy is in mess, only few sectors can look up. Automobile companies in India are already feeling the Pinch. Tata motors & Ashok Leyland have laid off thousands of temporary workers (Tata alone laid off about 4000 workers), closed their plants for short intervals to get rid of the excess inventory & Mahindra Automobiles reported a decrease of more than 40 % in profits . Tourism and hospitality are also down as people can’t spend if they don’t earn. Realty sector is the worst affected of all. Unitech in its bid to get over the current liquidity crisis and meet its financial obligations sold a stake in its telecom unit to Telenor of Norway, laid off hundreds of employees and is now planning to sell off a stake in the hotel chain it was developing. DLF, Omaxe and Prasvanath have also either laid off employees or resorted to huge salary cuts to tide over the crisis. Everyone is aware of the aviation sector mess and I don’t intend to elaborate further.
Now add to a already gloomy placement season, the effects of the terrorist attack on Mumbai. If investors can’t travel to India because of security reasons, will they invest in India? Will any investor put his money in a project, the security of which can’t be guaranteed by the local government? Experts say that the terrorist activities won’t affect the Indian economy in the long run but effects will be seen in the short run. So what future holds for the B-school batch passing out this year?
A prominent B-school in Gurgaon has opted for a roll-on final placement process this year as opposed to a week. A roll-on final placement process was completely unheard of till now among the top B-schools in India. Another famous B-school in Mumbai with an international campus has opted for two placement weeks against the usual one. The same applies to another famous B-school in Pune with affiliation to a prestigious group of Institutes. Another well known B-school in Ahmedabad which held its final placement week last month failed to place around 50% of its batch. The school has now opted for a roll-on process. All this was before the Mumbai Terrorist attacks, the effects of the attacks are yet to be seen on placements. According to some estimates, atleast 10-15% premier B-school pass outs of last year are either unemployed or being considered to be laid off. Companies which hired in bulk last year are non-committal about visiting campuses this year. Some companies have resorted to hiring only from their summer interns while many have completely freezed new recruitment.
However not everything is gloomy for students and companies. The positives and what students can do to tide over the current employment crisis will be discussed in the subsequent post.
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hey i agree with u , even my b-school has resorted to a placement-month pattern and not the traditional placement week. another fact that u may have forgotten to mention is the package being offered to the management grads. it has come down considerably by almost 40
ReplyDelete% compared to last year. our future does look gloomy, lets hope we can atleast earn enough to repay our education loan.
The whole humdrum on placements going down and salaries and placements getting effected stem from the fact that premier and A class Placements units of the MBA programmes were suffering from the " been there, done that" syndrome. All were heavily relying on few selected organsiations and these org used to visit campus and recruit , Year on Year. Get the statistics and you will be surprised at the percentage of new org visit and recruit. Day 0 to Day 1-all placements were over. The moment there has been a scenario of Day-2-3-4 , the fragile placement initiatives by these top rung institutes are out of the closet. I will suggest, this is the time when one needs to reach out and bring in thought leadership in placements. R we grooming them for being managers or leaders? If Leaders, we can count on our fingers, how many Incubation cells are there in our management schools . Can we look at incubation cells and align them with Business houses or organisations. Let the catch line say
ReplyDelete" we create leaders ..and not just managers"