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Techies fret as COVID-19 lockdown in US, Europe could hit 1.5 lakh IT jobs

"We have been taken care of during the lockdown but we don't know what will be our fate after the lockdown," said an employee at an IT firm in Sholinganallur.

Published: 03rd April 2020 04:10 PM  |   Last Updated: 03rd April 2020 04:35 PM   |  A+A-

Nearly 40 lakh techies will be working from home in India. (Photo | D Sampathkumar, EPS)

Express News Service

CHENNAI: Information Technology company employees are on edge. With the United States, Europe, Australia and Singapore under lockdown, the Forum for IT
Employees (FITE), an IT employees union, has raised an alarm claiming that signing of new projects has either been postponed or is getting cancelled as businesses in many countries are in crisis.

Projects catering to companies in the aviation and auto sector are being benched, said an employee in a reputed company in Sholinganallur. He said no employee has been sacked in his company. "We have been taken care of during the lockdown but we don't know what will be our fate after the lockdown," he said.

Aditya Narayan Mishra, CEO, CIEL HR Services, a staffing firm, predicts that there could be layoffs of anywhere between 1,00,000 to 1,50,000 in the IT sector, which includes both large and smaller IT companies. Mishra says that the bigger firms can weather the crisis and around 5 to 10 per cent of the workforce may get affected. "It all depends on how the companies will weather the crisis in the next 60 weeks," he said.

ALSO READ: Layoffs, hiring freezes are the new normal as companies feel COVID-19 heat

P R Vignesh Raja, the owner of Fusion Global Solutions Pvt Limited, a Chennai-based IT and manpower outsourcing company, told The New Indian Express that 40 to 50 per cent business in the eastern United States is hit. "We are also not able to collect our revenues from the clients. As a result we are not able to pay back our vendors who have to be paid bi-monthly as part of the contract," said Vignesh.

"We managed for the month of March but April will be a difficult phase. Now it all depends on how soon the situation in the US improves," said Vignesh highlighting the predicament of smaller IT companies. "Since I have to pay for the staff who are benched as the projects have come to a standstill, my only alternative is now to look at banks. But getting loans is not easy. The government has to step in and provide us with help," he said.

An IT professional working in a top Chennai-based IT company said companies catering to banking and healthcare are still getting orders although the on-site work has been shut for the next six months.

Parimala, president of FITE, told Express that IT employees are under tremendous pressure now. "The IT industry is one of the formal sectors which deploys more than 40 lakh employees. Even 5-10 per cent of job losses will have a serious social impact especially during this lockdown period and in the coming days. In addition to this, there are thousands of workers already on the bench waiting for new project allocations even before the announcement of the lockdown. The bench concept is a special arrangement used by IT companies to sign off on new project deals easily," she said.

She said FITE has put forth demands to both state and central governments urging that IT companies be told not to carry out forced resignations of employees in bench/service and ensure virtual/online joining provisions for new job offers considering the COVID-19 lockdown.

Meanwhile, switching over between companies to take up new or better employment opportunities across the industry is a usual phenomenon in the IT industry. "This has become a problem during the lockdown period. People who quit or are serving the notice period after resignation are facing either cancellation or postponement of their new job offers stating the cancellation of new projects by clients. Usually the last month's salary and final settlement from the last employer they served will take at least a month to come into their hands. So, the cancellation or postponement of new job offers will have an immediate effect on the financial stability of workers," Parimala said.

The National Association of Software and Service Companies (NASSCOM),
a trade association of the IT industry, refused to comment. "Our main task (now) is to follow the Prime Minister's directives and ensure safety of our employees. This can wait," a Nasscom official said.



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