“The IT sector is taking a beating because of the state of the economy,” said Pradeep Poluri, a Technical Lead of a top IT firm. “There will be pay cuts and there will be layoffs, but that is not new to this sector. From what I have seen those who do not perform are mainly the ones who are laid off. Freshers too get laid off but when you have a 20% dip in profit margins, the company is not left with much choice.”
According to Nasscom (National Association of Software and Services Companies), the trade body of the sector, IT services employed 3.7 million people and earned revenues worth $143 billion in the financial year 2016.
Though Nasscom has played down the layoffs in the IT sector, it is employees who are feeling the heat. In a statement, the trade body said the layoffs were a routine part of the annual appraisal process. However, for employees, nothing is as clear as it once was.
“There is uncertainty,” said a senior consultant working at CapGemini. “This is mainly because clients are holding on to the funds and waiting for the confusion to sort and then invest in IT services. This uncertainty is also because of the faster shift in the technology trend as well. Our major clients want to move towards digitization and automation, but these sectors are not yet fully equipped to deal with that, hence the confusion and reluctance.”
Apart from policy related issues in one of its main markets, the US, new technology is a huge challenge for the sector. Automation and cloud computing have hit revenues of IT companies as demand for traditional services like maintenance and software services has decreased significantly.
One of the biggest blows in this regard came when the Trump followed up on their election promise and banned the H1B visa. This visa allows companies to temporarily hire foreign workers in fields like science, engineering, and information technology. It is widely used in Silicon Valley, whose largest employers include outsourcing firms like Tata Consultancy Services, Infosys, and Cognizant.
“Most of us working in this industry aspire to work in the US,” said 34-year-old Sundar Rama, who works at Inautix and worked in the US in 2015. “This is a huge setback for all of us. I tried to make the switch when I was working there in 2015 but it did not come through. I was thinking of trying this year but now there is no chance.”
Digitization and automation was quoted as the biggest challenge that the IT industry faces today, by all the respondents Express interacted with. IT professionals also felt that a vast number of professionals in the field are incapable of being cross-skilled and up-skilled. They also said Indian IT is suffering because of a lesser spoken about factor – oil prices. According to one professional nearly 30% of IT service consumers are from the power sector which is on a tight budget owing to the oil price fall.
“Indian IT is going through a churn, there is no denying that,” said Poluri. “But that doesn’t mean it can be written off. Yes, there are systemic challenges but those who adapt and adopt new technologies will be the ones that benefit the most in the long run.”
Hiring has stopped or significantly reduced in many IT firms in the country which is giving those studying in colleges sleepless nights. However, for freshers who have been employed by IT firms, the mandate is simple – perform and enjoy the benefits or stand a chance of losing your job.
“I have been working for 6 months and am quite secure in my company,” said an employee of a well-known IT firm in Chennai. “I haven’t seen my colleagues being overly concerned about the industry situation. Having said that, there is a constant fear that things might change because when you’re dealing with technology, the change is always so rapid.”