The inside story of IT sector slowdown

Sunil Pradhan
Saturday, 22 July 2017

Cyber expert and Chief Executive Officer of ICybersec  Global Services Private Limited Pankaj Ghode said the recent layoffs are mainly due to cost optimisation due to automation, which is planned by the companies from past few years.

Automation and unwillingness of employees to adapt to multi-tasking are cited as major reasons by cyber experts which is leading to massive job losses in information technology (IT) sector.  The suicide of 25-year-old IT engineer Gopi Krishana Godha in Viman Nagar on Wednesday highlighted the pressure on employees working in the IT industry. Godha mentioned in his suicide note that there is no job security in IT which is making him scared.

The apology issued by Mahindra Group Chairman Anand Mahindra after the unusual sacking of a Tech Mahindra employee points to the need for employees of the IT industry to pull up their socks. Speaking on the issue, city-based cyber experts shared that there is massive rise in competition in IT industry and top companies are playing mainly on the project cost variable which is why companies are investing more on automation which helps in reducing cost.

Cyber expert and Chief Executive Officer of ICybersec  Global Services Private Limited Pankaj Ghode said the recent layoffs are mainly due to cost optimisation due to automation, which is planned by the companies from past few years. “In Indian IT industry, there are 76 per cent companies which are service-oriented,  14 are product-oriented and 10 per cent companies provide end user facilities to the customers,”  he said.

Now, product-oriented companies can survive as long as their software products are in the market. The problem occurs for services-based  companies as employees hired by them do not have to work once the project is completed and the next project is in the pipeline.

Due to cut throat competition, a company might lose the client and then the company thinks of sacking the employees to save on costs. Speaking on the need to improve India’s competency in global market, Ghode said there is a huge gap between college teaching and industry demands. “Similarly, employees are reluctant to learn new technologies making them less competent,” added Ghode. 

Experts also highlight the emergence of China and Philippines as new global markets of IT which will impact Indian software companies. 
Ghode said very few software companies are investing in research and adapting to future technologies leading them to lag in the competitive market. 

Cyber expert Anil Raj of Cybervault Security Services Private Limited said harsh government policies are also impacting Indian software business, which is triggering the layoffs. 

Speaking on skill development of employees, Raj said the employees working at mid-level of IT companies have less new skills and high salary package which is forcing IT companies to hire new talent at a cheap rate, thereby optimising company operating costs. 

Speaking on the global demand of IT products, Raj said that IT is core of all industries and so the demand is bound to increase. “Only thing is we are lacking the competency to cater to business needs of clients, which needs to be addressed,” added Raj. 

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