Finally, the message is clear on the wall. India needs to nurture more talent instead of merely churning out engineering robots to work on any one process and shift to another. What matters for setting up any office in Bangalore is what’s new in your brain and how you can create more patent-winning software products.
Since the Bangalore development centre in India has failed to cater the need, Twitter found it useless and decided to shut down but actually some of them were part of ZipDial, an Indian mobile communications startup bought by Twitter last year.
The move to close down the entire centre in Bangalore follows successful incorporation of the technology and talent of ZipDial. Now that their talent is no longer required, the company has reportedly decided to pack up the entire R&D centre in Banglaore.
Otherwise, Twitter has 3,860 employees globally and more than 120 based in Bangalore, India. Twitter is facing tougher competition from its main rival Facebook.
Twitter also missed revenue estimates for the quarter ended June. As advertisement money is dwindling with no corresponding growth in revenue for the eighth straight year, the company has opted out of Bangalore for now.
The company said in its tweet: “Engineering is a key part of our global company and we continue to focus our programs and efforts on improving the core product experience for our users worldwide… As part of our normal business review, we have decided to stop the global engineering work at the Bangalore development center.”
Twitter’s move comes close on the heels of what Yahoo did in 2014, firing 600 employees from its research and development centre in Bengaluru, the second largest outside the US.
Analysts have been warning that many Indian development centres, without adding value to intellectual property (IP) development, may face the axe. Another challenge, exclusive to Bangalore, Hyderabad and Pune will the emergence of China as a major destination for offshore robotic work processes.
China has set up 100 new engineering institutes to produce English-speaking graduates and they are likely to hit the global labour market soon. On the contrary, the Indian IT sector whose salaries are almost touching the sky nearing the US level, may find it difficult to match the low-paid China job seekers.
Moreover, taxation in India has doubled in the last three years in both direct and indirect taxes, including food and medicines. With high inflation hitting the most-needed sectors, India may lose out the race compared to emerging China centres and tax-free Dubai and other places.
India faced the worst ever recession-driven unemployment in 2000 and 2008. This time it may be much earlier than expected, if the NASSCOM and FICCI do not make an early move.