New Delhi, Sept. 01 : In the last couple of weeks, there have been many news reports of job losses, slowdown in multiple sectors, and probably everything negative.
IT firms are not insulated from slowdowns either, if the office gossips and layoffs numbers that we are reading in newspapers are anything to go by.
But, is the situation really as bad as it portrayed to be or it is the media hype? Tough to answer. Industrial experts also have only a part of the answer.
Speaking to Moneycontrol recently, Kris Gopalakrishnan, co-founder of Infosys, agreed that there is slowdown and in the short-term it is an issue that companies have to face. However, he was confident that IT firms can weather this slowdown.
IT firms are in a much better position compared to an automotive parts manufacturer. After all, people are investing in digital to stay relevant and that would translate to business for these companies even at the time of a slowdown. This includes migrating to cloud, applying artificial intelligence (AI) and machine learning (ML) to improve efficiency.
This also explains the increasing revenues from digital. For most IT firms, revenue from digital accounts for over 30 percent of the overall revenue and growing at over 30 percent year-on-year.
That is only one part of the story — a very optimistic one. But there is another side to this. It is that most of the Indian IT firms are not equipped to handle large volumes of digital projects coming their way.
An industry analyst Moneycontrol was interacting with earlier, said: “There is demand for digital projects from across coming to India. But sadly, we do not have enough skilled people here to handle them.” The case in point is the layoffs that are happening across India’s IT firms and the rise in bench strength we are witnessing across the companies.
The skills that are in demand are the ones mentioned above, such as AI, ML and cloud. Companies are doing their bit to train employees in these latest skills to scale their employee base in this space. On the other hand, they are recruiting people who are experts in this space.
Both attempts have not given them the scale they had wanted. In-house skilling can go only to some extent and is never enough for clients. An employee, who recently up-skilled himself/herself using the company’s training platform, is waiting to be assigned a project.
“We (employees) upskill ourselves. But what is the point? They deploy people who they recruit laterally for all these digital projects,” said a frustrated employee. But the experts in this field are so limited that everyone is fighting for the same resource. So, there is a catch there too.
As companies try to solve the chicken-and-egg problem, the projects are going elsewhere. Unlike IT services where India still has a major pie, other countries such as Philippines and Vietnam are also developing capability. Given that their demography is small, gives them the advantage to accelerate their skill growth much faster than India.
So, what can be done? Most agree that corporate push alone is not enough. Government’s intervention is necessary if we need to achieve the scale. If not, just like other sectors, India’s IT will lose out on the digital projects soon enough and may not be able to face the slowdown.
