IT jobs at risk in the upcoming quarters, unemployment to rise

Most big IT organisations are expected to reduce their workforces by 5% to 8%.


Following layoffs announced by Infosys and Cognizant, it is predicted that most big information technology (IT) companies in the country will be reducing their workforces by five to eight per cent. The middle and senior level employees are likely to be targeted.

In the quarters to come, the larger IT companies will be focussing on cutting costs and localising their businesses in the US. The repercussion in India will be that, approx. 10,000 to 20,000 employees may be rendered jobless in each of the big IT firms. This will increase the rate of unemployment in the country.

Companies are struggling with their margins because of significant discounts offered in their core businesses. Also, hiring has gone up in the US because companies are focussing on localising their operations in the US. But this local hiring has also put pressure on costs because hiring staff locally proves to be more costly than hiring employees in India. In addition, new technology has emerged, increasing demand for specialised skills. Experts feel that mid- and senior-level managers earning Rs 20 lakh to Rs 40 lakh will be at risk.

Like Cognizant and Infosys, most IT firms will focus on hiring fresh graduates so that costs can be cut down further. They are expected to let go senior managers involved in the delivery side of the business and who are not required to interact with the customers much. These are the employees who are likely to be less up-to-date with the changing technologies.

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