Three million jobs in Indian IT firms to be slashed by next year: Report
With automation taking place at a much faster pace across industries, especially in the tech space, domestic software firms that employ over 16 million are set to slash three million jobs by 2022, which will help them save a whopping USD 100 billion mostly in salaries annually, according to a report.
The domestic IT sector employs around 16 million workers, of which around nine million are employed in low-skilled services and BPO roles, says Nasscom.
Of these nine million low-skilled services and Business process outsourcing (BPO) roles, 30 per cent or around three million will be lost by 2022, principally driven by the impact of robot process automation or RPA.
Roughly 0.7 million roles are expected to be replaced by RPA alone and the rest by other technological upgrades and upskilling by the domestic IT players.
According to a report released by the Bank of America on Wednesday, the RPA will have the worst impact in the US, with a loss of almost one million jobs.
"TCS, Infosys, Wipro, HCL, Tech Mahindra and Cognizant and others appear to be planning for a 3 million reduction in low-skilled roles by 2022 because of RPA up-skilling. This is a USD 100-billion in reduced salary and other costs but on the flip side, it offers a likely USD 10 billion boons for IT companies that successfully implement RPA and another USD 5 billion opportunities from a vibrant new software niche by 2022. Given that robots can function for 24 hrs a day, this represents a significant saving of up to 10:1 versus the human labour,” says the report.
Robot process automation (RPA) is an application of software, not physical robots, to perform routine, high-volume tasks, allowing employees to focus on more differentiated work.
According to the report, faster automation is driven by the shrinking talent pool of high-skilled jobs in developing economies, the need for which will only jump, but the global high-skill talent pool is shrinking and exposing outmoded immigration systems.
The report further warns emerging economies, mostly India and China face the most risk of technology-driven disruptions, which can impact up to 85 per cent of jobs in countries like Kenya and Bangladesh. India and China are at the greatest risk of skills disruption, while ASEAN, the Persian Gulf and Japan are at the least risk.
With inputs from Hindustan Times via PTI
(Edited by Ridhika Joshi)
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