IT's raining jobs: 23,000 in 4 yrs

Mumbai: It could soon be raining jobs in India's booming Information Technology (IT) sector.

French IT consultant Capgemini is all set to merge with Kanbay International creating over 23,000 new jobs in the next four years.

Capgemini, which employs 6,000 proffesionals at present, is hopeful that the proposed merger would create a multinational behemoth with a workforce of about 35,000 employees in India by 2010.

The deal to buy out Kanbay, an IT services company that is listed in the US but operating mostly out of India, would be unlike regular mergers and acquisitions as far as job layoffs

are concerned.

The India headcount of Capgemini, which on Thursday signed an agreement to acquire Nasdaq-listed Kanbay for about $1.25 billion, would increase from 6,000 to about 12,000 by the end of this year.

Currently, Kanbay has a workforce of over 5,000 in India, which represents a large chunk of its worldwide headcount of 6,900 employees.

No layoffs are expected following the merger, as the US as well as Indian operations of the two companies are spread across different cities.

Moreover, Kanbay is more focused on financial services segment as compared to Capgemini, industry experts said.

The deal will also make Capgemini the largest multinational company in the Indian IT services space in terms of Indian headcount percentage, ahead of giants like IBM, Accenture and Electronic Data Systems.

The company would become the third largest in the total number of employees in the country after IBM (20,000) and Accenture (12,500), while excluding the employees in their BPO operations.

With a headcount of 12,000 employees by December end India will represent 16 per cent of Capgemini's worldwide employee strength of 67,000, ahead of 11 per cent each for IBM and Accenture.

However, Capgemini would surpass Electronic Data Systems (EDS) in terms of India percentage of worldwide employee strength, which has about 8 per cent or 9,000 of its total headcount in India.

IBM and Accenture have over 45,000 staff in the country, including the number of employees in BPO operations, while Capgemini has a BPO headcount of about 600 people.

Capgemini's BPO headcount is likely to remain unchanged through the end of this year.

The company expects to add over 4,000 employees in India by the end of 2007, while the total headcount could rise to 35,000 by 2010 representing about 30 per cent of the global workforce of over 90,000 employees.

It also expects the deal to add more than five per cent to its earnings in 2007 and 10 per cent in 2008.

The transaction is expected to close by early 2007, the two companies said in a joint statement.