The global economic slowdown has taken its toll on the IT companies inKerala, with some cutting salaries, while some others have already havinginformed stakeholders that they have no option but to cut operating costs.

The IT sector in the state has reachedan annual turnover of around Rs1,500 crore, providing direct employment to60,000 people, of which close to 30,000 are employed at the various Technoparkcampus here and Infopark campus at Kochi.

"We are not cutting salaries but maintaining status quo on increments. Weare assessing the performance of our employees," said Gupta, who was thefounder president of the G-Tech group of Technopark companies here.

"Earlier we were giving a flat 17-20 percent hike. But now, due to theslowdown, we will go in for performance-based evaluation." Executives insome other firms in the state capital said their companies were adopting a moredirect model, with salary cuts ranging from 15-20 percent.

"We have been told that our salary will be cut and that portion would bekept aside. The situation will be reviewed every three months. If themanagement sees some improvement, a portion of that salary will be given backto the employees," said an executive.

"Yes, salaries are being cut or status quo is being maintained. Employeeshave realised that there is no other option. They know that when the good timescome back, they would be compensated," said Vasudevan.

The slowdown has also affected suppliers of computers and peripherals onrentals. "An animation company at Technopark asked us to take back 20high-end computers, which we had given on monthly rental. One of their projectsgot cancelled," said an official.

The Kerala government has decided to chip in to help the companies in variousTechnopark and Infopark campuses. It has decided to defer payment of a part ofthe rent due from these companies in the next fiscal.