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Our Bureau

Chennai, Oct. 6 iGate Global, the wholly owned Indian subsidiary of Nasdaq-listed iGate Corporation, expects to hire less than the net of about 1,000 people it had indicated at the beginning of the fiscal.

Speaking to Business Line, Mr Phaneesh Murthy, CEO, iGate Corp, said, “Net new additions may probably not be 1,000 this year. It would be upwards of 500.” He added it was difficult to predict exactly how many net recruits iGate would take in this year since market conditions have been fluctuating. He clarified that the company would honour all commitments made to freshers on campus. Mr Murthy said that it would be easier for iGate to honour offers since 60 per cent of its net additions are from the fresher pool, while it is higher for other companies.

Commenting on iGate’s fortunes, especially in the US, he said a big challenge was that 60 per cent of iGate’s revenues came from the financial services segment. “We have taken a number of hits, partly from the mortgage clients. We were vendors to Bear Stearns and Lehman and that is another challenging scenario for us.”

The company’s revenues from servicing players in the mortgage business are down to 2 per cent of total revenues compared to 11 per cent some time ago. “The good news for us is that some banks we work with are doing well. Banks like Royal Bank of Canada and Union Bank of California have steered clear of the mortgage mess. Their work with us is going up.”

According to him, quarters ending December 2008 and March 2009 would pose tough challenges for the Indian IT services industry. He added that decision-making on the part of clients using IT would become slower in the next six months. “A lot of their mindshare is going into several different things now, with Washington Mutual and Wachovia being absorbed by other entities.”

Mr Murthy said that annual revenue growth for the Indian IT industry would be in the 10 to 15 per cent range, rather than the 30-35 per cent. “Another 700-800 small banks would go belly-up in the US in time.” That would be the turning point for the economy there, according to him. “Even now, the overall spending pie in financial services is shrinking. We have lesser number of big entities to sell to than earlier.”

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