This is a major business news item that impacts the sentiments of the bourses as well as the IT outsourcing industry. We are used to seeing similar headlines from multinationals of Bay Area, NA but this news coming out of TxS is a shocker as we haven’t heard such a mass retrenchment in Indian tech / IT industry.

The impact of new emerging technologies, more so AI, is being felt in a big way across the entire industry spectrum not limited to IT industry alone. The technology is rapidly forcing organisations to have a fresh look at what would be the downside of their business with the focus now being solely on how to keep the workforce employable and billable.

Re-skilling is inevitable both for the employers and employees as they need to co-exist in an environment that is changing faster than that was anticipated a few years ago.

Bain projects that India’s AI industry will generate 2.3 million jobs by 2027. However, the talent pool is estimated to reach just 1.2 million—leaving over a million positions to be filled through upskilling and training initiatives. Specialists with 10-12 years of experience in Java or Python are no longer needed and young engineers with AI skills are much preferred.

More skills are turning out to be redundant and that’s where the IT organisations are grappled with a dilemma of whether to lay-off associates or not. The most impacted areas is Infrastructure maintenance ( due to organisations moving to cloud), BPO (more automations are happening here) and mushrooming GCCs that have taken away the work from traditional IT companies.

Well, the bell is tied around the cat by TxS and it will definitely be followed by other majors. Another interesting phenomenon is that the retrenchment is aimed at senior and middle management cadres (meaning managers and senior managers) who are always hands-off from technology. Re-skilling them is a tough call as the cost of retaining them is huge. The bottom of the workforce pyramid is going to be still broader as the salary of middle or a senior manager takes care of more new juniors.

There is also a heavy pressure on organisations relying on IT outsourcing to Indian majors especially from NA, Canada and Europe. They too have an agenda to cut IT infra, application and outsourcing costs drastically as their business is also facing the shift in tech trends.

Once the darling of the bourses is on the verge of a big shake-up and the industries’ cutting down on new hires and the serving associates will hugely impact the unemployment scenario besides those passing out of engineering colleges. The recruitment model revolves around hiring young, self-taught engineers — even before they graduate.The entire educational supply chain would need a revamp to adjust with the changing tech trends.

#techtrends

#ai

#layoff