Do latest job cuts herald fewer IT jobs in the future?

Job cut

By 2024, the number of people in IT will shrink significantly, warns market research agency Forrester.

It says that in line with tech management structures change, roles will become more strategic and externally focused.

Automation, cloud, external services, and empowered business users will reduce the number of people needed in IT.

In a few years, we will start to see reductions as soon as a large, installed-base of legacy systems is removed or reengineered.

Early signs are already visible with major IT firms announcing job cuts. Most recently, IBM, Wipro, Infosys, Cognizant and Tech Mahindra announced that they are reducing staff number, mostly in India, as automation takes hold.

ALSO READ: Infosys Wipro TCS Congnizant sack employees

Infosys’s revenue for the fourth quarter rose 4.9 percent to $2.57 billion. This was up from $2.45 billion last year. But, the company had to announce its hire and fire policy  due to increasing automation and thrust on artificial intelligence in its operations and projects.

Bengaluru-based Wipro’s revenue improved 2.7 percent sequentially to $1.95 billion in the three months to March. But, it expects its business to report no growth in April-June.

Tech Mahindra, whose revenue was up 10 percent to $1,116.1 million in the quarter ended December, is letting the jobs go as part of annual performance evaluation.

Networking major Cisco has also announced that 1100 employees will be removed from job as the company expects a 6 percent drop in revenue.

IT companies say there is nothing unusual about the job cuts and those were part of their annual structural realignment. But, the worrying factor is that many companies have frozen hiring plans as they still need to have clarity on business situations.

According to a report by Quartz, customer support, program testing, basic coding and programming, post delivery maintenance and project managers face the risk of redundancy in the coming years.

Yet, all is not as bad as techies fear. Digital initiatives in many countries and investments by IT companies for skill developments are still encouraging.

According to India’s Nasscom, around 2.5 to 3 million new jobs are expected to be created by 2025. In Financial Year 2017, the sector has created 1,70,000 new jobs. According to the firm,  IT industry added 6,00,000 new jobs in the last three years.

How automation and robots driven by AI will impact job creation?

Sectors like engineering, manufacturing, automobiles, IT and banking now uses work automation. HR solutions firm PeopleStrong points out that all high transaction and labour intensive jobs will take a hit as automation adoption increases.

According to PeopleStrong CEO and Founder Pankaj Bansal, there will be a visible change in the next 3-4 years, first major effects will be seen in the sectors like manufacturing, IT and ITeS and security services and agriculture.

“We predict that by 2021, 4 out of every 10 jobs globally would be lost because of automation. And of these, one in every 4 will be from India. That sums up to 23 per cent of job loss in India,” Bansal said.

However, there is some light at the end of the tunnel. According to Francis Padamadan, Country Director KellyOCG India, a talent management solutions provider, “automation will not take away all the jobs because you still need someone to build and monitor the robots. So, while jobs mostly at the bottom of pyramid will be affected, new jobs will get added”.

Do latest job cuts herald fewer IT jobs in the future?

By 2024, the number of people in IT will shrink significantly, warns market research agency Forrester.

It says that in line with tech management structures change, roles will become more strategic and externally focused.

Automation, cloud, external services, and empowered business users will reduce the number of people needed in IT.

In a few years, we will start to see reductions as soon as a large, installed-base of legacy systems is removed or reengineered.

Early signs are already visible with major IT firms announcing job cuts. Most recently, IBM, Wipro, Infosys, Cognizant and Tech Mahindra announced that they are reducing staff number, mostly in India, as automation takes hold.

ALSO READ: Infosys Wipro TCS Congnizant sack employees

Infosys’s revenue for the fourth quarter rose 4.9 percent to $2.57 billion. This was up from $2.45 billion last year. But, the company had to announce its hire and fire policy  due to increasing automation and thrust on artificial intelligence in its operations and projects.

Bengaluru-based Wipro’s revenue improved 2.7 percent sequentially to $1.95 billion in the three months to March. But, it expects its business to report no growth in April-June.

Tech Mahindra, whose revenue was up 10 percent to $1,116.1 million in the quarter ended December, is letting the jobs go as part of annual performance evaluation.

Networking major Cisco has also announced that 1100 employees will be removed from job as the company expects a 6 percent drop in revenue.

IT companies say there is nothing unusual about the job cuts and those were part of their annual structural realignment. But, the worrying factor is that many companies have frozen hiring plans as they still need to have clarity on business situations.

According to a report by Quartz, customer support, program testing, basic coding and programming, post delivery maintenance and project managers face the risk of redundancy in the coming years.

Yet, all is not as bad as techies fear. Digital initiatives in many countries and investments by IT companies for skill developments are still encouraging.

According to India’s Nasscom, around 2.5 to 3 million new jobs are expected to be created by 2025. In Financial Year 2017, the sector has created 1,70,000 new jobs. According to the firm,  IT industry added 6,00,000 new jobs in the last three years.

How automation and robots driven by AI will impact job creation?

Sectors like engineering, manufacturing, automobiles, IT and banking now uses work automation. HR solutions firm PeopleStrong points out that all high transaction and labour intensive jobs will take a hit as automation adoption increases.

According to PeopleStrong CEO and Founder Pankaj Bansal, there will be a visible change in the next 3-4 years, first major effects will be seen in the sectors like manufacturing, IT and ITeS and security services and agriculture.

“We predict that by 2021, 4 out of every 10 jobs globally would be lost because of automation. And of these, one in every 4 will be from India. That sums up to 23 per cent of job loss in India,” Bansal said.

However, there is some light at the end of the tunnel. According to Francis Padamadan, Country Director KellyOCG India, a talent management solutions provider, “automation will not take away all the jobs because you still need someone to build and monitor the robots. So, while jobs mostly at the bottom of pyramid will be affected, new jobs will get added”.

1 COMMENT

  1. Universal Basic Income (UBI) is the only light at the end of the channel according to the Zero Work Theory (ZWT).

    What we need today is; a Scientific outlook to deal with this issue of Artificial Intelligent (AI) ,ROBOT automation and the historical perspective to understand the situation. “Think Out Of The Box”. The ideology comes from the book titled “An Alternative to Marxian Scientific Socialism: The Theory Reduction in Working Hours (RWH); ….” Published in the year 1981. More of its details in the links bit.ly/2mGAUWg , http://bit.ly/2eARyEx http://bit.ly/2nR4MAP

    The gist of the theory is; there must be A Gradual Reduction in Working Hours and finally to abolish the Wage labor completely. However, today, in the changing world situation, I realize that an Equitable Basic Income Guaranty or the Equitable Universal Basic Income(EUBI) fulfils the objectives of my Reduction in Working Hour Theory. In fact, EUBI is qualitatively different from the UBI, AS IT WILL ALLOW THE PEOPLE TO BECOME FREE FROM THE DRUDGERY OF THEIR WAGE-LABOR, IF THEY WANT. A SUBSTANTIAL PORTION OF WORKER THUS QUITTING THEIR JOBS WILL POSITIVELY RESULT IN THE INCREASE IN JOBS, WAGES AND THE AI AUTOMATION. The recommendation of an adequate amount of EUBI or UBI without having the compulsion of wage-labor, mean Zero Working Day for those who would opt for it, is final GOAL of the RWH Theory. Today, I prefer the name Zero Work Theory (ZWT-I). I have explained more about this theory in the articles in my blog.

    The principle behind the ZWT is that the fruits of the societies science and technological progress should not be appropriated only by a few elite but it is their historical responsibility today, to see to it that the benefit should be equally shared among all members of the society.