Business

IT companies to layoff up to 2 lakh engineers annually for next 3 years

Executive search firm Head Hunters India today said the job cuts in IT sector will be between 1.75 lakh and 2 lakh annually for next three years due to under-preparedness in adapting to newer technologies.

"Contrary to media reports of 56,000 IT professionals to lose jobs this year, the actual job cuts will be between 1.75 lakh and 2 lakh per year in next three years, due to under- preparedness in adapting to newer technologies," Head Hunters India Founder-Chairman and MD K Lakshmikanth told PTI, analysing a report submitted by McKinsey & Company at the Nasscom India Leadership Forum on February 17.

McKinsey & Company report had said nearly half of the workforce in the IT services firms will be "irrelevant" over the next 3-4 years.

McKinsey India Managing Director Noshir Kaka had also said the bigger challenge ahead for the industry will be to retrain 50-60 per cent of the workforce as there will be a significant shift in technologies. The industry employs 3.9 million people and the majority of them have to be retrained.

"So, when we analyse these figures, it is clear that 30 to 40 per cent of the workforce cannot be retrained or re- skilled. So, assume that half of this workforce can continue to work on old skills, then the balance will become redundant.

"So, the number of people who will become redundant in the next three years will be about five to six lakhs. This will workout to, on an average, between 1.75 lakh to 2 lakh per year for next three years," Lakshmikanth explained.

However, he said job cuts will not take place in major cities like Mumbai or Bengaluru, but cities like Coimbatore or a few remote places, he said.

Lakshmikanth further said the IT services industry is passing through an uncertain time as the growth in digital technologies like cloud-based services is happening at a much faster pace and the companies are combining the learning of some of the new technologies and reskilling.

"Because of the changing technology, the most affected will be the professionals aged 35 and above, for it would be very difficult for them to get jobs," Lakhsmikanth said.
Asked if it is fair to blame US President Donald Trump's policy for job cuts, Lakshmikanth said it is not fair because he has fulfilled the promise after winning the elections.

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