IT companies are facing massive hurdles due to the growing automation and the COVID-19 pandemic that has left many people unemployed.
Numerous Indian tech giants reported huge dips in the total strength of their employees for the first time in the latest quarter due to less hiring and cost-cutting measures which left some employees out due to the Coronavirus pandemic.
Every year these software companies add a huge number of new graduates and are added as a strong indicator for the growth of the IT sector in the country. However, the trend of new jobs has been falling in the last few years due to automation. The pandemic has worsened growth further.
Adoption of automation by the IT companies has resulted in reducing the number of new hires and also left an impact on existing jobs. It is believed that increasing automation adoption can handle 70 percent of the current workload without the need for humans to intervene.
The COVID-19 pandemic has added to the declining jobs in the IT sectors. Hearsay suggests that clients may reduce outsourcing of their work, which is adding to the fear of more job losses in the future; the recovery in this sector is not clear yet.
The COVID quarter
For the COVID quarter (April-June), Infosys job count went down by 3,138, TEC by 4,786, Wipro by 1082, HCL Technologies by 136, and Tech Mahindra by 1820. In total, the decline in job count is 10,962 people. These people left the software companies during the COVID hit quarter.
Before the lockdown, total number of employees at TCS stood at 4,48,462 and later in June the number fell to 4,43,676. Infosys, in total, has 2,42,371 employees, and this number fell to 2,39,233. Noida-based HCL’s total count of employees before the lockdown was 1,50,423 after two months, the number fell to 1,50,287.
Wipro in total had 1,82,886 employees in March, and this number fell to 1,81,804. While Tech Mahindra’s headcount was 1,25,236 before lockdown, later in June, the number fell to 1,23,416.
Demand for freshers has also dropped, with some companies hiring through the hiring process and others offering fewer jobs than they did before. Nearly 70 percent decline in demand for professionals with 0-3 years of experience band. The demand for workforce in the BPO/IT sector fell drastically by 60 percent.
The pre-existing economic slowdown
IT companies’ growth was scaling down in the last few years due to the global slowdown. Accenture is a prime example: the company reported revenue growth of 11 percent, which fell to 9.5 percent and 9 percent in the first and sector quarters of 2019. This shows the slowing trend started in these companies.
However, industry experts are predicting that the sector will jump back to double-digit growth by converting digital challenges faced by customers into revenue along with off-shore engineering services and product development will continue but the traditional application and infrastructure support will go down as automation will cut down the need for human power.