As the industry grows with digitization and automation and it become the new normal, IT companies are seeing a rise in layoffs and this may continue for the next 2-3 years, say experts. In IT sector the jobs cut can be between 1.75 lakh to 2 lakh annually for next 3 years due to under-preparedness in familiarizing with newer technologies.
“Contrary to media reports of 56,000 IT professionals to lose jobs this year, the actual job cuts will be between 1.75 lakh and 2 lakh per year in next three years, due to under- preparedness in adapting to newer technologies,” Head Hunters India Founder-Chairman and MD K Lakshmikanth told PTI, analysing a report submitted by McKinsey & Company at the Nasscom India Leadership Forum on February 17.
McKinsey & Company reported that nearly half of the IT services firms’ workforce will be “irrelevant” over the next 3-4 years.
Noshir Kaka, McKinsey India Managing Director, had also said that the bigger challenge ahead for the industry will be to train 50-60 percent of the workforce again as there will be a significant shift in technologies. The industry employs around 3.9 million people & the majority of them have to be retrained.
“So, when we analyse these figures, it is clear that 30 to 40 per cent of the workforce cannot be retrained or re- skilled. So, assume that half of this workforce can continue to work on old skills, then the balance will become redundant. “So, the number of people who will become redundant in the next three years will be about five to six lakhs. This will workout to, on an average, between 1.75 lakh to 2 lakh per year for next three years,” Lakshmikanth explained.
However, he added that the job cuts will not take place in major cities like Bangalore or Mumbai, but cities like Coimbatore or a few remote places.
Lakshmikanth further said the IT services industry is going through an uncertain time as the growth in digital technologies is happening at a much faster pace and the companies are combining the learning of some of the new technologies and reskilling.
“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,” Lakhsmikanth said.
Asked if it is fair to blame US President Donald Trump’s policy for job cuts, Lakshmikanth said it is not fair because he has fulfilled the promise after winning the elections.
“How can we blame Trump, for he has fulfilled the election promise of giving jobs to local people including IT professionals by tightening H1-B visa norms, which were being misused by companies by paying less to foreign professionals working in US. It is for companies to tackle the situation and such situation they have undergone in previous years. It is not new for them. They know to tide over it,” he said.
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Himani Sharma, From ITvoir News Desk