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IT to create 20-38% fewer jobs this fiscal; reskilling vital: Nasscom

21 July 2017

Reflecting the ongoing turbulent times for the Indian information technology sector, industry body Nasscom has said the industry would create 20-38 per cent fewer jobs in FY2018 compared to fiscal 2017.

The industry would create 1.3-1.5 lakh new jobs (lateral plus campus) in FY18 against the 1.8 lakh jobs it had added in FY17. At its peak, the sector added nearly 2.40 lakh jobs a year.

Nasscom president R Chandrashekhar said that while automation was leading to job loss, new jobs too were being created. The Indian IT industry, which has been grappling with automation and changing needs of clients, has been reorganising its workforce to deal with automation and achieve cost savings, he said.

Earlier this month, TCS and Infosys, which account for around a fifth of India's software exports of $116 billion, saw employee headcount reduced by 1,414 and 1,800 in April-June quarter respectively. Wipro, which announced its quarterly results on Thursday, reported a 1,309 rise in headcount.

Speaking to reporters on the sidelines of a human resources meet organised by Nasscom in Chennai, Chandrashekhar said, "We would not want that anyone should lose their job at all. But, given the circumstances, some of these cases will come up. We believe that companies have to handle this issue with sensitivity, transparency and with agility."

The idea of the HR Summit, he said, was to share experiences in this regard and if changes were needed on HR policy norms, Nassscom would look at these.

There will be lower net addition of techies due to sectoral headwinds and macroeconomic factors, he said. "Tech is eliminating jobs in every sector, including IT. It is also creating jobs. Countries like the US and UK have been adopters of technology and have experienced the same cycle. Today, their unemployment levels are close to zero. While there is job loss and pain, ultimately, it is the only route to economic prosperity," said Chandrasekhar.

IT services companies have been the largest organised recruiters in engineering campuses. But without specifying any numbers, Chandrashekhar said the proportion of workforce coming in through campus placements would come down this year. "Companies are trying multiple avenues, including campus selection, lateral hires, etc. But campus will be on the lower side as compared to earlier years," he said.

Over 30,000 students were placed through campus placements last year in Tamil Nadu and this is not expected to change, he said.

He added that it has become imperative to decouple revenue and headcount growth. "Growth has to outpace impact of automation for a firm to be a net hirer. If a company does not undertake realignment, it can impact 0.5-3 per cent of people. There was a time when 100 per cent jump in revenues meant 100 per cent increase in employees. Today, it is only a 60 per cent jump in employees," he said.

Assuaging fears of the IT industry crumbling under pressure, the Nasscom chief said the industry was fully capable of responding to global changes.

Automation itself was creating jobs, said Chandrashekhar. "Besides, there will be new opportunities which get created in other sectors, because the value lies at the junction point of technology and domain."

He added that what was happening in IT should be expected to follow in other sectors.

India contributes to 56-57 per cent of the global IT services market. Growth for the next financial year was expected to be 7-8 per cent and the growth in employment 4 to 5 per cent.

The sector skill council of Nasscom has identified 55 new job roles and 155 new-age skills required for the future. Big data and analytics are two major areas opening up - the market opportunity in both these is expected to grow eightfold from now to $16 billion by 2025, with a spurt in demand for business analysts, solution architects, data integrators, data architects, data analysts and data scientists.

"The challenge in terms of skilling is now clear and we are buckling down to that," he said.

In the next five to seven years, it is expected that half of Fortune 500 companies will shift to Asia; at present, a quarter are in the region. This means the industry will have to serve more Fortune 500 companies in the region, culturally different from the companies it has been dealing with so far, he said.

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