Layoffs – Headcount cut as companies rush to automate IT – Knowledge Series

January 6, 2018
Layoffs - Headcount cut as companies rush to automate IT - Knowledge Series

2017 was not one of the best years for the IT fraternity. Indian Techies faced a lot of nightmares as the year progressed, so is the worst over or 2017 was just a glimpse of what is yet to come in 2018? The fact that India’s $160 Billion IT industry laid off more than 560,00 employees, when compared to the recession in 2008, these figures look far scarier. 2017 also witnessed low hiring rates in IT and according to some expert’s entry-level openings reduced to that of the half which was observed over the last couple of years. This impact is seen around all IT companies, from Tata Consultancy and Infosys, to mid-sized players, across have reduced their headcounts considerably.

A quick look at what lead to this…?

The signs were out there for everyone, all trade pundits had predicted a disruption in the traditional roles, digitisation and automation are the primary reasons for this commotion in IT.

Besides disruption and automation, the more fundamental problem affecting the IT industry is the lack of real skills amongst most of India’s engineering graduates, they clearly don’t have ready skills that make them employable. Indian IT companies refused to accept and change from the easy traditional money making set up, to the new and sought of alien world of Social, Cloud, Internet Of Things, etc…,

‘America First’, an ideology of President Donald Trump has also added ammunition to the existing fire. The fate of H-1B a six-year temporary work visa, which the Indian companies heavily depended on is in limbo, which has further added to India’s IT Blood Path.Data Analytics Banner

The Path Ahead

It is predicted in 2018, IT giants of India like Wipro, Cognizant, Infosys, and Capgemini are facing the challenge of managing their workforce, by scrutinising their performance, and thereafter either pruning or re-skilling their workforce

A pioneer in the IT companies, Accenture, finds itself in the similar quandary, where they are suddenly faced with a new problem, that of managing a huge workforce which does not have the skills of today and is unable to learn them immediately.

You see this is a matter of productivity, what 50 programmers or analysts could do five years ago can be done with less than half the numbers of smart thinkers today, naturally, there will be a downfall in manpower requirements, the focus now is not on numbers but the number of skills.

Keeping in line with this thought, over the next two quarters, the hiring intention across the IT sector in India will further weaken. Hence it is only wise that IT professionals should not get disheartened with the news and instead look at it as an opportunity, and in the next 6-12 months, upscale their skills in areas of IT which will be in high demand. Machine Learning, Concepts of Artificial Intelligence, Cloud-Based Enterprise Resource Planning, such enabling technologies are the future of tomorrow.

A trend in hiring is noticed, where in the coming year, companies want fresh talent which is upskilled, rather than investing time in training, especially during such testing periods in IT.

This nervousness amongst the companies is not going to end soon. And the impact will be seen by all, as according to predictions by analysts, nearly 70% of roles in IT will be put to risk due to automation. These disruptions are deemed as inevitable for the next 2-3 years, as it is that long it will take to transform and adapt to new skills in demand, and a positive shift will only be seen by 2020.

India more specifically, on the other hand, will be seen as creating high-value jobs against the earlier high volumes job creation. It’s the race between Skill and Scale, and the coming years will see most companies leaning towards skills.

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