Indian IT industry still hiring, reports of layoffs wrong: Nasscom
But ‘mantra is re-skill or perish’, warns industry association in response to reports that top companies are handing out pink slips.
India’s IT sector continues to be a “net hirer” and added 1.7 lakh jobs in 2016-17, said Nasscom on Thursday responding to fear of layoffs in the industry.
The industry association said the fourth quarter of the last financial year saw top five IT majors hiring 50,000 employees. It said that the retrenchment is performance linked and is impacting only 0.5-3% of the total workforce of the IT sector, implying that this year is not different.
“Reports of mass layoff in IT sector are rejected,” said R Chandrashekhar, president of Nasscom. But he did agree that automation is leading to job cuts. “There is no doubt that jobs are getting cannibalised by automation. But new jobs are also being created”.
A panel comprising industry leaders from Wipro, Mindtree, Tech Mahindra and Cognizant on Thursday placed the blame of all problems in the IT sector on skilling.
“Skills are the new currency and its life cycle is becoming shorter. So the mantra is re-skill or perish,” said Chandrashekhar.
For many years now the emphasis in the IT sector is shifting from scale to skill. And with changing stakeholder expectations and an ever-changing job scenario, new skills are required. And Nasscom said that in the next five years the sector will have to brace for up-skilling 30-40% of its workforce.
Experts ask whether this will put pressure on the margins of the IT companies and will impact their revenues in the mid-term.
While quashing all reports of layoffs, the panel did agree that there has been a reduction in the revenue to job ratio.
“Last year we showed that IT grew at over 8%, employment grew at 5%. So there is a skill shortage,” said CP Gurnani, managing director and CEO of Tech Mahindra.
Over the last few weeks, reports of layoffs across the sector have been making headlines.
Reportedly, IT majors such as Wipro, Infosys, Cognizant, Tech Mahindra are all on the path of handing out pink slips. Estimates suggest that thousands of employees in the sector could be retrenched.
The development comes at a time when Indian IT firms are facing challenges with stricter work permit regime in countries like the US, Singapore and Australia and automation is eating up jobs.
PTI reported IT Secretary Aruna Sundararajan as saying recently that IT companies have assured that there is “nothing unusual” this year and decision to not renew some contracts were part of the annual appraisal process.
IT employee associations such as the Bangalore-based FITE (Forum for IT Employees), narrate a different story as it sought help from the labour commission in Chennai against layoffs.
But Nasscom warned against such activism. “Rise in employee activism will put the competitiveness of the IT sector at risk,” said Chandrashekhar.