The Bloodbath in Indian IT Continues as Wipro Lays Off 600 Employees

IT sector

Getting a job in the IT sector has been associated with stability and financial lucrativeness in India. In a country where unemployment has remained a longstanding challenge, the IT boom nearly two and a half decades ago allowed many software professionals to earn staggering six-figure salaries. Many left the shores to settle in the U.S., UK, and Australia – favoured by the relaxed, inviting visa policies of the day. However, the sad part is all good things come to an end, and it seems to be the case with the India IT sector.

Wipro, one of the largest IT employers in India, today announced to prune 600 of its staff, after conducting its “rigorous” appraisal process. Mistaking the layoff for an outlier can be an error of judgement, as other leading IT companies too are planning to restructure their operations. Cognizant and Infosys are also letting go employees they think are not performing to the “expectations”.

So, why is the Indian IT sector in a state of turmoil? Well, there are a host of inter-connected factors at play, but two developments seem to have hit the $150 billion industry the hardest.

Digitisation of IT 

There is a seismic shift towards demand for new technologies, including cloud, artificial intelligence (AI), IoT, analytics, and social. According to a research by Future Market Insights, the global IoT spending will reach US$ 7.13 billion by 2020. Majority of engineers in India currently lack knowledge about these new technologies. Training such a huge workforce – a herculean task – will need time, resources, and a behemoth investment. Some experts of the opinion that many IT professionals may not be trainable.

There are a significant number of IT jobs that can simply be automated. Developments in AI have meant that non-customer facing jobs are being replaced with AI. NASSCOM, the Indian IT industry’s trade lobby, has cautioned that by 2020, the sector should prep for 20% reduction in jobs. Most of the cuts are expected to be in the lower- and middle-management profiles.

H-1B and 457 Visa 

During his campaign, and after his inauguration, Donal Trump has made it clear that will follow through on his “Buy American and Hire American” rhetoric. On April 18th, he signed an executive order that will overhaul the H-1B visa. Indian IT companies have been bemoaning that America’s protectionist policies will have a massive impact on the Indian IT sector. However, it is pertinent to note that it’s not just the U.S. which is shutting doors on Indian techies – many IT hubs around the globe seem to have pulled the plug on offering jobs to immigrants.

Australia abolished its 457 visa on April 18 – the same day Trump signed the executive order. The visa scheme allowed Australian companies to sponsor immigrants for up to four years. Malcolm Turnbull, in a Facebook post, announced that 457 visa was being ended to ensure Australians have a fair chance of seeking employment. The 457 visa is being replaced with temporary visas – however, acquiring them will be more difficult than before.

Taking a cue from its Trans-Atlantic neighbour, New Zealand put the interests of its workers first by tightening its skilled work visa rules. It was reported that growing pressure on housing and road traffic prompted New Zealand government to take measures against rising immigration levels.

About Sudip Saha 2 Articles
Sudip Saha is one of the leading tech consultants in APAC, having served at key positions in leading IT consulting firms. He has extensively written about the commercial viability and impact of next-generation technologies, most notably AI, IoT, and Big Data. Sudip’s forte lies in offering a nuanced analysis on the key developments in the tech landscape. A reputed thought-leader, his views have been published in leading publications, including CIO, ZD Net, Economic Times, and The Economist