Karnataka IT exports to fall by 5% this fiscal: Official

BANGALORE: Global meltdown is set to pull down Karnataka's IT exports by five per cent in the current financial year, but state officials dismiss talk of large-scale layoffs in the sector.

"We expect four to five per cent fall in exports for the year (2008-09) compared to last year," Karnataka's IT Secretary Ashok Kumar C Manoli told reporters here.

In 2007-08, the state's IT exports, driven by companies such as Infosys and Wipro, totalled Rs 56,500 crore. Karnataka accounts for one-third of the country's total IT exports.

Voice-based business process outsourcing (BPO) companies, in particular, who depend on outsourcing, have come under strain in Karnataka. There is apprehension over what would happen to 1.5 lakh to two lakh BPO employees working in various firms.

"SMEs in the IT sector are finding it difficult to survive in the present situation," Manoli said.

He said many of the big IT companies were engaged in cost-cutting exercise in the last few months and employees are taking additional workload, while recruitment of new staff has been delayed.