Indian IT may continue layoffs as digitisation and automation become the new normal, IT biggies like Infosys, Cognizant and Tech Mahindra are seeing a spate of layoffs and this trend may persist for the next 1-2 years, say experts.
Indian software exporters in particular are facing headwinds in the business environment and stricter work permit regime in countries like the US, Singapore, Australia and New Zealand.
India’s third largest software services firm Wipro has fired hundreds of employees as part of its annual “performance appraisal”. According to sources, Wipro laid off around 600 employees, while many predict the number to go as high as 2,000.
Wipro said it undertakes a “rigorous performance appraisal process” on a regular es company with most of its operations in India, appears set to cut at least 6,000 jobs, which represents 2.3% of its total workforce.
The company’s workforce number stood at around 260,000 as on December 2016 with the majority of them in India.
Last week, Cognizant Technology Solutions offered its top executives – directors, associate VPs and senior VPs, a voluntary separation package, a part of its plan to shift operations to automation and digital technology.
It was reported that at least 1,000 executives are expected to go. The company is expected to eventually cut at least 6,000 jobs or 2.3 percent of its total workforce.
“As part of our workforce management strategy, we conduct regular performance reviews to ensure we have the right employee skill sets necessary to meet client needs and achieve our business goals. This process results in changes, including some employees transitioning out of the company,” a Cognizant spokesperson said.
“It’s a situation wherein the available talent haven’t kept up with the pace at which the industry was evolving and hence, many of them find themselves redundant,” said Rituparna Chakraborty, TeamLease Services Executive Vice-President and co-founder.
“It is a painful transitory phase. However, things would look up in the next two-quarters as each of the IT services company successful steers towards a stable growth phase,” Chakraborty said.
Pink slips are likely for jobs in manual testing, technology support and system administration since these are increasingly going to be managed by AI and robotics process automation based systems.
However, there is a surge in demand for latest and innovative technologies like data science, artificial intelligence and digital domain-specific skills.
With newer technologies in artificial intelligence (AI), robotic process automation and cloud computing, which help complete the job with less manpower, software companies are now having to reconsider their strategies.
The branch of technology that deals with the design, construction, operation, and application of robots, as well as computer systems for their control, sensory feedback, and information processing is robotics.
These technologies deal with automated machines that can take the place of humans in dangerous environments or manufacturing processer, or resemble humans in appearance, behaviour, and/or cognition. Many of today’s robots are inspired by nature contributing to the field of bio-inspired robotics. These robots have also created a newer branch of robotics: soft robotics.
Employees being laid off is an emotional event that can leave you feeling wronged. Knowing the difference between an illegal layoff and an unfair layoff can help you decide whether to fight or move on.
Employment in most states is “at will,” meaning you can quit or the company can fire you without cause. However, companies still have to follow federal and state employment laws covering issues such as discrimination, whistleblowing and layoff notices.
According to a report, the hiring process for 2017 is likely to be slow with IT majors expected to cut by 40% the engineering graduates they planned to hire. In fact, IT sector veteran Mohandas Pai, in December last year, had said that 20 crore middle-class youth would have no jobs or less jobs by 2025 due to increasing automation and improvement in technology.
The trouble in Indian IT industry started with US president Donald Trump’s ‘Buy American, Hire American’ campaign. The US is in the process of tightening the norms for H-1B visas.
Nearly 86 percent of the H-1B visas issued for workers in the IT sector go to Indians and this figure is now sure to be scaled down to about 60 percent or even less, ASSOCHAM had earlier said.
Cautioning against a huge decline in remittances from US, the apex trade body said the US visa move could disturb remittances by 8-10 per cent.
The Executive search organisation GlobalHunt MD Sunil Goel said: “This rationalisation does happen in every 3-5 years in the industry through new-age technologies. Goel further noted that “the consolidated trend may continue for next 1-2 years”, but sees it as an opportunity for IT professionals to upgrade themselves and get into the new age technologies where demand is going to be huge.
Talent management solutions provider KellyOCG India Country Director Francis Padamadan said, “We will continue to see some amount of rationalisation happening among IT companies though it is difficult to put a number.”
Japanese brokerage firm Nomura, in a research note, said that the job cuts of 2-3 percent of the overall headcount of nearly 7,60,000 by Infosys, Cognizant, Tech Mahindra and Wipro are not material.
However, this kind of rationalisation is likely to be a continuing phenomenon until the workforce realignment towards digital skills is complete.