150-200K IT/ITeS people are likely to lose their jobs

Thyssenkrupp plans to cut another 5,000 jobs
Reuters | The new job cuts come on top of 6,000 layoffs announced last year, taking the total number to 11,000 but drawing criticism from some investors, including No.2 shareholder Cevian, that the group’s restructuring is too slow and not radical enough.

At least 150 to 200K IT/ITeS employees are likely to lose their jobs over the next few quarters due to Covid-19

At least 150,000 to 200,000 IT/ITeS employees are likely to lose their jobs over the next few quarters due to Covid-19, Business Standard reports.

The Indian IT and BPM sector employs around 4.4 million people, directly and indirectly. According to experts, 3-5% of the workforce could be shed at most firms as automation accelerates and IT contracts get either renegotiated or wrapped up prematurely.

Industry insiders and analysts peg the number of IT and ITeS employees set to lose their jobs over the next few quarters — because of the COVID disruption — between 150,000 and 200,000.

That will push a large chunk of employees onto the bench as they won’t be deployed on billable projects. Accenture, Cognizant, Capgemini, and IBM are reportedly laying off thousands while headcount fell at TCS, Infosys, and Wipro in the June quarter.

The IT companies have said that they are training benched staff for redeployment on new projects, but analysts are wary of an increased bench count. 

According to CNBC report published in July this year, the COVID-19 pandemic has led to about 30,000 jobs being lost in the IT and BPO sectors in India, with 60,000 being sent on leave without pay (or furloughs), conversations with a number of stakeholders reveal.

The HR head of a leading IT company, who did not want to be named, warned that clients were delaying payments and cutting back on spending and that the “July to September quarter may see more pressure and possibly more job losses.”

McKinsey & Company report had said nearly half of the workforce in the IT services firms will be “irrelevant” over the next 3-4 years. The bigger challenge ahead for the industry will be to retrain 50-60 per cent of the workforce as there will be a significant shift in technologies.

“because of the changing technology, the most affected will be the professionals aged 35 and above, for it would be very difficult for them to get jobs.” McKinsey report said.

As the nature of work changes with automation, millions of people may need to switch occupations and acquire new skills. Most employers are offering access to Coursera, Udemy, Percipio to enable employees to acquire data analytics automation, machine learning (ML), RPA skills, that could boost productivity, save time, and enable a better work/life balance.


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