Amid reports of layoffs by IT companies, industry body Nasscom on Thursday sought to dispel such fears saying that the industry has been adding around 2 lakh jobs each year for the past three years, added 170,000 jobs in FY17 and would add 150,000 this fiscal. It even said that it would add around 2.5 million jobs by 2025, which means around 357,142 every year. However, while trying to give such reassurance, Nasscom seems to be speaking in different voices. For instance, Nasscom president R Chandrashekhar, in an interview to business news channel CNBC TV18 earlier this week, said, “While the first $100 billion required about 3 million people, the next $100 billion is going to require only 1.5 million people. It is not just the numbers, it is also the kind of skills that are needed”.
Even Thursday’s press release by Nasscom, which dispels reports of lay-offs in the industry, while talking of the total employee base of the industry of 3.9 million, includes start-ups and the e-commerce sector. For instance, it said that of the 3.9 million employee base, 95,000-100,000 are employed in start-ups and 50,000-60,000 in e-commerce. This means the industry body has taken all indirect employment into account and is doing the same while making future projections.
Industry observers say that a combination of slowing growth and increasing automation is compelling IT firms to lay off employees in numbers not seen before and such involuntary exits could continue in the course of the year. Top-tier firms including Infosys and Cognizant are either letting go of employees, deferring salary hikes or trimming the variable part of compensation. Cognizant is understood to have let go of some 2,000 people, or approximately 2.3% of its workforce. Infosys is believed to be reducing its headcount by about 3,500 people or roughly 1.7%. The company has not confirmed the numbers but has indicated various measures are taken post the bi-annual appraisal. Together, the top half a dozen firms could see lay-offs of close to 20,000 or higher, according to industry observers.
However, on Thursday, Nasscom’s Chandrashekhar refuted such reports without providing any specific details. “We categorically reject the reports of mass layoffs in the sector. FY17 saw 1.7 lakh people being added, while in Q4 alone, the gross hiring was of over 50,000 by top five companies,” he said at a press conference. Chandrashekhar, though, added that employees will have to re-skill or perish as the world moves to new technologies like automation, robotics, analytics and cyber security. “Performance-linked workforce realignment impacts about 0.5-3% of the talent pool and there is no change this year. It is something every company does to stay competitive and have the right skill sets,” he said.
Nasscom chairman Raman Roy said companies are making huge investments in training and re-skilling their employees on new technologies to ensure they stay up to date. “The need for re-skilling talent is a reality that we have to address. To keep up in a fast-evolving technology environment, the IT industry must reinvent itself by re-skilling its employees in new and upcoming technologies,” he added. Chandrashekhar said there has been a gentle deceleration in the growth rate of net hiring as companies move focus from scale to skills.