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Indian IT sector finds itself in a fix; techies left sweating

Information Technology’s struggle to cope with shift to digitisation and automation coupled with clients’ reluctance to invest leaves employees bearing the brunt of layoffs and hiring freeze.

Published: 05th June 2017 05:17 AM  |   Last Updated: 09th June 2017 08:42 PM   |  A+A-

Image for representational purpose only.

Express News Service

CHENNAI: It is no secret that the Indian Information Technology (IT) sector is facing trying times. While there are numerous statements coming in from top industry voices to instil optimism in employees, there is still an air of uncertainty and nervousness among professionals with layoffs and hiring freeze doing the rounds.

“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 layoffs, but that is not new. From what I have seen, those who don’t perform are generally 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, 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 IT sector layoffs, it is the employees who are feeling the heat. In a statement, the trade body said layoffs were a routine part of 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 funds and waiting for the confusion to sort itself out so that they can invest in IT services. This uncertainty is also because of faster shift in technology trends. Our major clients want to move towards digitisation and automation, but these sectors are not yet fully equipped to deal with that.”

Apart from policy-related issues in the US, new technology is posing a major 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 US President Donald Trump followed up on his election promise and tightened the visa norms, including that of the H1B visa. This visa allows companies to temporarily hire foreign workers in fields like science, engineering, and IT. 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 IT aspire to work in the US,” said 34-year-old Sundar Rama, who is employed with Inautix and had worked in the US in 2015. “This is a huge setback. I tried to make the switch when I was working in 2015 but it did not come through. I was thinking of trying this year but now there is no chance.”

Digitisation and automation were quoted as the biggest challenges that the IT industry faces by all 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.”

Hiring has stopped or significantly reduced in many IT firms in India, 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.

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