Lockdown Extension Will Lead To IT Job Cuts: NASSCOM Ex-President; WFH Will Change IT Forever

The extension of the 21-day lockdown to curb the spread of Novel coronavirus has put a pressure on the Indian IT industry!

The prolonged lockdown may lead to layoffs in the Indian IT industry. The NASSCOM former president R Chandrashekhar said that the work-from-home culture may become a positive development as seen with a long vision as it opens up newer avenues and save investments by IT firms.

Read to find out more…

Reasons Why Big IT Firms May Not Resort to Layoffs As of Now!

According to the former bureaucrat, the larger companies may not be actually cutting jobs for two reasons:

1. They do not want to lose their employees and also they have money to pay. Many of the big companies, even if they do some job cuts it might be at the most people who are on temporary or intern type.
2. They don’t want  the regular and permanent employees to go. So as long as they have sufficient flexibility in their power, they would continue.

In addition he told PTI, “But beyond a point that it goes on, for let us say, two months or three months, then even for them, they will feel the pressure. They may not just keep on providing subsidies to the employees. So the key question will be how long that goes on.”

Founder of a mid-sized IT firm said the job cut in the IT industry is unavoidable even for bigger firms if the present situation across the globe continues for a few more months.

The former chairman of NASSCOM, B V R Mohan Reddy said a clear picture as to what is going to happen has not yet emerged as the situation with all respects is still evolving.

Reddy remarked there will be a demand shrinkage for the IT industry as the entire world is under stress. Indicating the tougher times for the Indian IT sector ahead he said, “There is no economy in this world that is going to do well in this situation. All of them are in some form of stress. So, therefore, there will be a demand shrinkage.”

Work From Home: A New Culture?

R Chandrashekhar said the work-from-home systems that are being adopted may have a negative impact on the industry for a short period of time but in the long run it would change the work culture which was not experienced by many of the IT firms in India till now.

As per Chandrashekhar, the work-from-home, in the long run results in savings in terms of employee productivity, logistics cost and office space. The client companies offering contracts to Indian IT firms, which are also undergoing similar experiences, may not object to work remotely henceforth.

He said, “Human behaviour (adapting work-from-home culture) changing is not easy. This coronavirus has forced us to change faster than we were changing.”

The Future of Startups Dicey?

Chandrashekhar also said that the startups which are surviving on funds infused by venture capitalists may face tougher situations if the present scenario deteriorates. It would be a big challenge for the growing enterprises as the investments they get are based on their ideas and future revenues and the present situation under which peoples movement is curbed may cease their progress.

“Where will they (startups) get money to pay salaries to their employees. Venture capital investors would not pay the money or invest their money to pay salaries because they are not in the charity business.If the employees are not paid and if they leave and it is difficult for the startup again to come up. So the whole investment plan goes for a toss,” he said.

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