Unemployment on rise

Job offers withdrawn, internships now unpaid

Print edition : May 22, 2020

At a job fair in Chinchwad, Maharashtra in 2019. Photo: Danish Siddiqui/REUTERS

Engineering and business school graduates stare at a bleak future as job offers are withdrawn or revised, while delays in joining dates add to the climate of uncertainty.

THE extended COVID-19 lockdown is wreaking havoc on the country’s job market. Not only are existing jobs vanishing because of a complete shutdown of the economy, but prospective jobs for engineering and management graduates, who typically enter the job market at this time of year, are withering. Job offers are being cancelled, and in cases where they are not the inordinate delay in joining brings its own uncertainties.The crisis has not spared even the prestigious Indian Institutes of Technology (IITs) and the Indian Institutes of Management (IIMs) as big-budget companies, including foreign multinationals, are reported to have withdrawn job offers.

Thousands of engineering and business graduates could be left in the lurch as a consequence, according to industry watchers. An estimated three lakh business school students and 7.5 lakh engineering students graduate every year. Even in normal times an overwhelming percentage of these students (over 60 per cent, according to some estimates) are “unemployable” for various reasons. The rest get placed with various core sector companies or IT or ITES companies. The COVID-19 crisis, however, has dashed the hopes of this section, too.

IIT Delhi, for example, which had just started its campus placement process, saw big American companies withdrawing their offers in bulk in March. Ten job offers from big oil companies and two finance companies were withdrawn. Alarmed that this could trigger an exodus by other companies, Professor V. Ramgopal Rao, Director of IIT Delhi, put out a tweet on April 3 appealing to companies to not withdraw their job offers. He pointed out that once a student received a job offer, he/she was not allowed to participate in the placement process and was thus left with nothing at all if the offer was withdrawn. “Please do not complicate the lives of these brightest children in an already complex environment. If at all, they are capable of getting you out of recession faster than you can imagine,” he wrote in an impassioned plea.

Gartner, an American business research and advisory company, withdrew its job offers to 11 IIT students from Delhi, Kanpur and Madras and six IIM Calcutta students. Top American oil companies also either withdrew their offers or revised the terms. Schlumberger, the world’s biggest oilfield service provider company, wrote to the IITs on April 6 saying that it was forced to either reduce the package or withdraw some job opportunities in order to adjust to the “sudden reduction in customer spend”.

Professor V. Ramgopal Rao’s appeal did put a brake on such withdrawals, but the picture remains bleak. “We are definitely looking at delays in joining and probably cuts in salary packages,” he told Frontline. He said that companies in the core sector, which required the physical presence of employees either on site or in factories or oil/gas fields, were the most affected. “Those in IT or ITES are comparatively less affected because they can still have their employees work from home. In any case, a lot of business activity is happening online now, so IT/ITES companies are not so badly affected. They have not yet cancelled their job offers but have hinted at delaying the joining of new recruits.”

For students whose job offers have been withdrawn and those who could not participate in the campus recruitment process because of the lockdown, IIT Delhi will hold a special recruitment drive in July or “as and when the situation normalises”, said Prof. Rao. He added that companies had responded positively to this special drive. “Many companies which in normal times are not able to recruit from IITs have indicated their preferences, and we are hoping to place all our students then,” he said.

Prof. Kantesh Balani, Chairman of the placement committee at IIT Kanpur, was more worried about the fact that internships of final-year students had been put on hold. “Basically, internships pave the way for future employment opportunities. Most job offers materialise during internships as pre-placement offers. Now that internships are gone, the students who will be passing out now will have to look for jobs in the market once the situation normalises, and they will have to compete with the next batch passing out at that time. This will put them at a disadvantage. At the very least, such students will lose a year,” he said. He said that the All India Committee on IIT Placements will meet to discuss ways to tide over the crisis. He felt that the companies that had withdrawn job offers should be blacklisted because students could not be made to go through such an ordeal for circumstances beyond their control.

The reduction in internship offers, and the fact that most of the internships that are still available have become unpaid, is also a major concern at the IIMs. LinkedIn, a social media platform for professionals, is full of details of either cancellations/withdrawals of internship offers or paid ones being turned into unpaid opportunities. According to a IIM Lucknow student, most companies have pushed back joining dates to July and internships have been shifted completely online.

While the IITs and IIMs will help their students tide over the tough times, students passing out of second-rung colleges bear a much heavier burden. Sachin Shah, co-founder of a placement consulting firm, SuccessGATEway, said: “Mostly companies do bulk hiring from second-rung colleges across the country. Hundreds of thousands of engineering and business graduates get placed across sectors. These students will now find the going tough. We are anticipating a crisis bigger than the subprime-induced crisis of 2008-09. It is going to be a mayhem in the job market.” According to him, the crisis will hit all sectors, unlike in 2008-09 when the IT sector bore the brunt. “This time all sectors are going to be hit equally, including the IT sector, because a lot of IT activity happens in core sectors and when there is no work in the core sector, what are the IT engineers going to do?”

There is also a view that this may be a good time for students to pursue a master’s degree. “Since we are looking at a time frame of at least one year for the crisis to pass, the students should acquire a master’s degree in the meantime. By the time they finish their degree, the market will have normalised and they will have a good degree in hand,” said Prof. Rao. Meanwhile, colleges are taking care to keep their students motivated during these stressful times. “We hold regular counseling sessions for our students. I myself have talked to them personally,” said Prof. Rao.