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May 18, 2017 05:58 PM IST | Source: Moneycontrol.com

Despite reports of mass layoffs, IT industry will remain a major employer in FY2018, says Nasscom

In FY 2017, the sector added 1,70,000 people, Nasscom said in a report titled ‘Jobs and Skills: The Imperative to reinvent and disrupt’. In the last quarter of FY17, top 5 software companies hired over 50,000 techies.

Despite reports of mass layoffs, IT industry will remain a major employer in FY2018, says Nasscom

Priyanka Sahay & Harsimran Julka

Moneycontrol News

The apex Indian IT association Nasscom along with leaders from companies such as Wipro, MindTree, Cognizant, Tech Mahindra spoke in a joint conference on Monday on concerns of layoffs in the Indian IT industry that is resulting in anxiousness among employees and even students planning to join the tech industry.

The Indian IT industry accounts for over USD 150 billion in revenues and employs about 39 lakh people currently. Nasscom said that figures floating in the media of about 56,000 to 60,000 employees getting laid off in 2017-18 are highly bloated and the industry will instead be a net hirer this year.

“We are alarmed by the kind of headlines that media is giving on IT layoffs. In FY 2017, the industry added over 170,000 employees. This year too, the IT industry will remain a net hirer,” said R Chandrashekhar, President of Nasscom.

Nasscom said that amongst a total employee base of 3.9 million, about 100,000 people are employed in startups and about 60,000 in e-commerce alone.

“We hired 50,000 people in January to March period alone. Layoffs are only 0.5-3 percent of workforce based on workforce alignment. It is based on skillsets and appraisals. Hiring continues across sector, contrary to media reports,” Chandrashekhar said.

IT industry leaders said that the industry needs re-skilling in areas such as cloud, business analytics, AI, VR, robotics and other digital technologies.

“Layoffs are an internal process of companies, where they look at their priorities and align talent; this is a key competitive strategy and there is no modification to this practice in the current year,” Nasscom’s new Chairman Raman Roy said.

The heads of companies such as Tech Mahindra, MindTree and Wipro however emphasized the need for reskilling employees.

For senior managers, Wipro said that there is a need for re-inventing experience. "If your experience turns into insights, you will be in demand in the industry. If your experience turns to baggage, then you may have a cause for worry," said Bhanu BM, COO of Wipro Technologies, which is expected to lay-off about 500 people.

The industry leaders said that constant automation has made many jobs redundant.  "We are already delineating from a people-intensive model. Last year, the total headcount of the industry grew just 5 percent, whereas revenues grew 8 percent," said CP Gurnani, CEO and MD of Tech Mahindra, which is expected to lay-off about 1,000 people.

Rustow Ravanan, CEO of MindTree said that senior managers who just have people management skills need to acquire domain knowledge as things proceed to automation.

“The half-life of knowledge in this industry is becoming shorter. Students and even senior managers need to reskill themselves,” he said. MindTree plans to hire about 1,500 people to its staff workforce of about 17,000 people in 2017-18.

Cognizant discounted rumors of layoffs of over 6,000-10,000 people, saying the numbers are ‘vastly exaggerated’.

“We have publicly said there are no layoffs in the company, we don't know from where the 6,000 layoffs number came from. There are only performance management measures. All of us are hiring. Cognizant hired 1000s of people just in the March 2017 concluded quarter,” said Ramkumar R, SVP at Cognizant.

(This story has been updated)
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