IIMs feel US meltdown heat

BANGALORE: Even as Wall Street struggles to cope with the Lehman Brothers-Merrill Lynch double whammy, the aftershocks are reverberating across the Indian Institutes of Managements in India. For, they have been great hunting grounds for these banks. Lehman Brothers has been recruiting from IIM-Ahmedabad since 1997 and in the past few years, been picking 12 people on an average every year. In March 2008, Lehman Brothers recruited 10 students from IIM-A. Mihir Lal, co-ordinator, placement cell for class 2009 at IIM-A said, "It's too soon to say whether or how this will affect our placements. We'll know only in November when we have our lateral placements and then in February when we have our final placement." 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. Saurav Mukherjee, chairperson-placement of IIM-B, said the institute is not counting on Lehman for campus recruitment this year. However, "Since Merrill Lynch has been taken over by Bank of America, we are hopeful about it. We might write to Bank of America for placement," Mukherjee said, adding that none had so far withdrawn their summer placement offers. 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. "We're reading about the bank going bankrupt but yet to receive an official communique on this. However, if this comes true, these letters to our students will not stand. Naturally, it is a cause of concern. However, we're still hoping against hope," said Krishnan, representative, external relations cell. Lehman Brothers, a Slot 0 recruiter (the first day of campus recruitment) at IIM-C, will not make it next March when final placements happen. "We have at least 15 other investment bankers who come calling, but the absence of Lehman Brothers will certainly be felt because it is invariably among those who make the highest offers," Krishnan added. So, employees will probably have to kiss those lavish hikes and bonuses goodbye. Especially now that many companies are said to be reviewing bench strength and HR goodies like salsa classes. In more ways than one, the sweet music may be coming to a halt. 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. Prospective employers, though, are loving it, especially the ones in sectors which have been complaining of a talent crunch. The so called A-minus companies can now dare to dream of hiring A-plus talent without having to pay the moon for them.
source : times of india