IT sector to reduce their head count, slated to remove 30k-40k mid-level staff: T V Mohandas Pai

IT sector to reduce their head count, slated to remove 30k-40k mid-level staff: T V Mohandas Pai

  • The move is being looked at as a part of improving productivity with less no of people.
  • Focused on automation and up-skilling, IT is banking on resources with multiple skills

Indian IT sector is currently facing a rough patch owing to slow growth and a reduction in demand. Faced with this challenge, industry is looking to reduce the head count at their mid level staff. Generally speaking, in IT, mid-level staff is the one who has around 8-12 years of experience. As per T V Mohandas Pai, former Chief Financial Officer of Infosys Limited, we can expect a reduction of around 30k-40k reduction at mid-level staff.

However the industry experts believe that these should not be taken as a alarming bell since these are the normal procedural changes which takes place whenever the industry trends achieve a certain level of expected maturity. As per the experts, such job losses does happen around a frequency of every 5-6 years when the current IT phenomenon matures and gives place to a new set of growing trends.

It is being argued that after every 5-6 years, we can see a new flush of latest technologies and the only way to survive such job losses is to keep oneself updated, re-skilled and up-skilled.
At such times, mid-level staff is the one who is being looked up at to contribute at par with the salary they are getting. And in absence of the mid-level staff who are willing to re-skill themselves, then they become easy target of job losses.

Job level stagnancy is another factor which contributes to job losses when slow down happens. When there is growth, people do get promotions and this keeps the job level pyramid moving and keeping in shape. But during such tough times, promotions takes a hit and results in stagnation at mid-level. This fattens the structure and as a course correction, companies had to reduce mid-level staff to re-arrange the pyramid.

Its a regular phenomenon and it will happen after every 5-6 years, said T V Mohandas Pai, the curent Chairman of Aarin Capital and Manipal Global ducation Services.

The numbers mentioned, 30k to 40k is rough figure based on expert experiences. Actual count could be more or less depending on the individual companies. As mentioned earlier, improving the skill sets is the key and if those mid-level staff does improve their skill sets, they should be rest assured of finding other jobs in the market. However more the expertise, high chances of landing a better job.

Also read: Its a time when clients want high deliverables at less money from IT sector

Amid slowdown, their is already huge pressure form clients to cut costs and improve productivity by using automation and AI enabled services. As per various IT firms, many clients are asking them to cut rates and work towards costs saving upfront. Nowadays even the client do understand business and the cost structure. Hence in current time, its getting tougher winning big deals. And its imperative for IT firms to retain old clients at low costs rather than letting them go off. Firms are trying to agree with lower margin initially which later can be adjusted against improved productivity and automation.

Employee rebadging is also a way nowadays to win large deals. Re-badging means that when a IT firms enters into a deal with a client, it takes over some estimated no of employees from the client and hires them. There are many such examples like TCS GM deal, Infosys Verizon deal and HCL Volvo deal. But such large deals are not very frequent.

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