IT Giants Face Worst Time In A Decade

Indian IT sector faces crunch time as hiring drops by 40 per cent compared from 2015-2016. Growth in the sector has been mere 5 per cent as said by National Association of Software. Indian IT firms face stern pressure due to global economic unrest, having an effect on their operating margins. Growth in Europe has been very low. IT firms contract dealing in pounds have dealt a blow after the Britain’s exit from the European Union, affecting their margins.

H1B visa has been another issue for IT firm already facing revenue and margin crisis. The reform calls for more than doubling the minimum salary of H1B visa holders to $1,30,000. If implemented make it difficult to replace US employees with foreign workers and experts say it is likely to deal a body blow to companies such as Tata Consultancy Services (TCS), Infosys and Wipro in its present scenario. This may force them to make changes in their business planning, hiring more Americans cutting Indian employees working in the US.

Infosys has hit a 10 year low on campus hiring. Infosys which used to hire close to 16,000 employees in FY16 has chosen to hire only 5,000 in FY17, and releasing around 9,000 employees. Infosys has rather opted to hire paid interns instead of trainees who will be assessed after two months to be hired as the sector needs skilled employees for now. Other companies like TCS, Wipro, and Cognizant have also decreased hiring by 40 per cent.

The supply of jobs has been wayward less than the demand. As the sector faces a slump due to automation and shift in technology, here is what can be done to evolve it. It is important to focus on the grass-root level first. The focus should be shifted from getting a degree to mind with knowledge.

Tapping entrepreneurial energy to create more jobs, encouraging grass root innovations can help reviving the employment in the sector. Degree holders hardly go into research, more preference should be given to research funds.

Another very important aspect is the bridge between the industry and the universities. Around 4 lakh engineers graduate every year in India while only 20 per cent are employable for IT services. It is the high time people must start looking into other sectors as well.