Start-ups that went back on their word to hire graduates from the Indian Institutes of Technology (IITs) have been blacklisted across all IITs in the upcoming placement season.
While blacklisting companies for dishonoring the institutes’ placement policies is a regular feature at IITs, this is the first time that they have struck off such a large number of firms for a year. Interestingly, some of the blacklisted startups were started by IIT alumni.
The All IITs Placement Committee panel responsible for campus hiring across all the Indian Institute of Technology (IIT) in the country has banned the blacklisted 31 companies from recruiting students for a year after a flurry of complaints against the firms.
The reason for the bans is that the past few months recorded several startups delaying job offers made during campus placements, thereby injuring the interest of graduates.
Besides, some start-ups cited business problems to slash salaries they had originally committed to paying IIT graduates, going back on their promised packages. At least five companies had reduced salaries by as much as 25%.
Last week, students in Tamil Nadu sat down on a hunger strike after Chennai-based L&T Infotech withdrew 1,500 campus placement offers.
“Around 135 students from across IITs were affected due to the last-minute revoking of offers by these startups. A majority of the startups that we are blacklisting this year are those that had revoked their offers from institutes in Mumbai, Kharagpur and Roorkee,” said a senior professor from the All-India Placement Committee (AIPC). The AIPC decided on the action at IIT-Kanpur on August 14.
The placement committee, of IITs. which usually meets twice a year, met out of turn to thrash out a strategy after Flipkart and other start-ups such as CarDekho and Hopscotch deferred the joining date of students from IITs and Indian Institutes of Management (IIMs) by four to six months.
The IITs felt the need to lay down some ground rules before campuses send out invitations to companies in July for the next placement season. The list was compiled after taking feedback from all affected IITs.
The banned companies will have to go through intense scrutiny before they are allowed to recruit students after the one-year embargo gets over.
IIT-Bombay revealed on Thursday nine of these companies that were banned from campus recruitments.
Of the nine firms on the IIT-Bombay blacklist, GPSK, Johnson Electric, China, Portea Medical, Cashcare Technologies and PepperTap were blacklisted for revoking job offers made to students.
The LeGarde Burnett Group was banned for revoking an offer and having a fake office address.
Another company named Mera Hunar was barred from campus recruitments as it came with a different name and hired students for another startup.
IndusInsight was blacklisted for delaying the joining dates of candidates.
These start-ups will be barred from hiring from IITs in 2016-17, said Babu Viswanathan, placement advisor at IIT-Madras.
“Startups will be allowed after a good background check such as proper funding to support the recruitment, and growth prospects. Our aim is to avoid job offers being revoked or delays in joining date in the next placement season,” said Dipesh Chauhan, placement manager at IIT-Bombay.
The blacklisted companies will be allowed to visit campuses next year after they appear before the placement committee, Viswanathan clarified.
The convener of the committee, Prof Kaustubha Mohanty, said the exercise is a precaution taken in the interest of students in all the 23 IITs.
“We decided that when we ask a particular company to register with us, we will try to ask for data on their sources of funding, statement of accounts, balance sheet, and number of employees. We used to ask for a lot of details earlier too, but not so stringently,” he said.
The IIT-Bombay decision follows months of speculation that a slowdown in the start-up sector was hurting placements in India’s top schools. The sector as a whole, has been going through a turbulent time, with funding coming down and valuations being slashed.
Investors infused some $1.15 billion in Indian start-ups in the first quarter of this year, down as much as 24% from the December quarter, which itself had seen a slump in investments of 48% from the preceding three months.mThe number of start-up deals also fell 4% to 116 in the quarter, the report said.
At present, start-ups account for almost a third of campus job offers across IITs and IIMs.
Start-ups have gained prominence on campuses and account for about 20-30% of all companies that come to IITs. In fact, at IIT Madras alone, the number of students joining start-ups rose from 13.7% in 2014-15 to 33% in 2015-16, Viswanathan said.
“Their presence is growing. So, to avoid any fallout, we want to send the message that only if you are serious about hiring our students, come to the IITs,” he said.