Impact of M&As on Employment in the Indian Information Technology (IT) Industry

Abstract

Mergers & Acquisitions (M&As) are an important feature of both domestic investment and global FDI. Post-liberalization, India has been an important contributor to both domestic and global M&As, led by the IT sector. This study attempts to investigate the impact of M&As on employment for Indian Information Technology (IT) firms for the period 2007–2015. The Indian IT sector has been a leader for the Indian economy, with its contribution to economic growth, exports and employment generation. However, there is a significant gap in studies examining the impact of M&As on employment in the IT sector. This study makes an important contribution as it attempts to fill that gap, using mixed-methods techniques for a study of both domestic and cross-border M&As. We combine multivariate regression analysis with qualitative techniques of content analysis and interviews for an in-depth view. The study finds that M&As had a positive influence on employee strength in the context of the Indian IT sector, for both domestic and cross-border deals. The study thus highlights the important policy prescription of M&As being a source of employment and growth, even during periods of slowdown in the global and domestic economy.