IT crisis: Nasscom denies layoffs, says sector net hirer of 150,000 people

Nasscom on Thursday refuted reports of mass layoffs in the information technology (IT) sector, saying the industry will hire about 150,000 people this year on “net” basis although techies will have to re-skill themselves to stay relevant.

Business Standard, last week, had reported that the country’s information technology (IT) sector is seeing a spate of layoffs by IT majors like Tech Mahindra, Wipro, Infosys and Cognizant.

“We categorically reject the reports of mass layoffs in the sector. FY17 saw 1.7 lakh people being added, while in Q4 alone, the gross hiring was of over 50,000 by top five companies,” Nasscom President R Chandrashekhar told reporters in New Delhi.

The churn in the IT sector — which is moving towards increasing automation, use of artificial intelligence and is beset by tightening visa regulations — is likely to affect mid-level employees with 10-15 years of experience the most, as many are averse to learning new skills, industry experts have said.

Nasscom also said that employees will have to “re-skill or perish” as the world moves to new technologies like automation, robotics, analytics and cyber security.

Chandrashekhar said the association has consulted its members who have assured that the industry continues to be a “net” hirer, adding about 1.5 lakh people this year.

Also, new opportunities are emerging in areas like tech startups, e-commerce, Digital India and digital payments. As many as 3 million new jobs are expected to be created by 2025.

IT companies have started their annual performance appraisal cycles, which often leads to a number of terminations based on poor performance.

Business Standard had reported that Infosys, India’s second largest IT firm, has deferred salary hikes for its mid-level employees till end of July to reduce cost and ensure better payouts at the same time. Some employees may even get salary hike after July.

However, Nasscom could not clarify the reason why there was noise around the layoffs this year.

The reports of mass scale layoffs have compounded the worry in the industry, as the sector is already battling challenges in the business environment and stricter work permit regime in countries like the US, Singapore, Australia and New Zealand.

Nasscom Chairman Raman Roy said companies are making huge investments in training and re-skilling their employees on new technologies to ensure they stay upto date.

“The need for re-skilling talent is a reality that we have to address. To keep up in a fast-evolving technology environment, the IT industry must reinvent itself by re- skilling its employees in new and upcoming technologies,” he added.