Infosys' today's announcement has shown stability in the IT sector and has given relief to its thousands of employees.
IT giant Infosys has announced that it will honour all the offers it has already made to the fresh graduates. At a time when many firms have laid off employees and cut salaries due to the coronavirus pandemic, Infosys’ today’s announcement has shown stability in the IT sector and has given relief to its thousands of employees. Though Infosys said that it will stop hiring, freeze salary hikes, and suspend promotions, it added that there will be no Covid-19 related layoffs. Last week, another IT giant TCS made a similar announcement where it said that it will honour all the offers made to freshers.
Even as the lockdown hit almost all the quarters of the economy, the IT industry had a comparative advantage of working from home. On top of it, the Ministry of Home Affairs has allowed the IT and its related services to operate at 50 per cent strength. This is further expected to provide some cushion to the IT sector and the overall services sector.
However, the company anticipates a continued slowdown in the near-term due to a broad-based global economic recession and with some impact of the project deferrals and softening of discretionary expenditure, some margin pressure in the near term is also likely to be developed. Adding to the woes, most of the contracts and projects earned by the IT companies are in the first half of the fiscal and the unfortunate economic crisis across the world can harm the annual income of the IT industry. Since the Indian IT industry is largely export-oriented, large scale disruptions in advanced economies such as the US, Germany, the UK, etc may also adversely affect the Indian IT industry.