The impending US recession and the rising rupee have constantly taken their toll on IT services companies like TCS(Tata Consultancy Services), Infosys and Wipro. The initial moves were to halt salary increments and look at a 6 day work routine, so that they could charge clients more in the same period.

The time has come for layoffs and the latest news is that TCS has laid off 500 employees. This comes immediately after their appraisal and there are claims that the employees "voluntarily resigned" from the firm. Additionally, TCS has announced a 1.5 percent reduction in variable salaries.

Additionally IBM has shown new trainee recruits the door. Are we going to see a similar situation to the crisis in 2002-2003, where new recruits where given the pink slip even before they joined? Will the other IT majors follow suit?

These are difficult times for Indian IT majors. The stock market rise in the last year has not seen participation from these stocks and they have actually lost 26% - 28% over the last year.

An official recession announcement by the US will sink these stocks to never before levels. The biggies have already begun looking at new markets, and further diversification of their revenue streams. There is no doubt that they will weather these storms. Will the investor community stay with them is the question?

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