Automation, US visa issues impact Indian IT jobs for the first time in H1 FY18

Key highlights:

• The sector which was one of the largest sectors in terms of job creation has now fallen
• This is the first time jobs have fallen to record low employment levels in the IT industry
• The six IT companies together employed 59,940 new employees in the first half

The impact of US visa restrictions has taken a toll on IT sector jobs for Indians. The sector which was one of the largest sectors in terms of job creation has now fallen as six of the largest employers in the $154 billion Indian IT industry saw their workforce shrink in the first half of FY18, according to a Live Mint report.

This is the first time it has fallen to record low employment levels since the IT industry had put India on the global map for software services.

The National Association of Software and Service Companies (Nasscom), which at the start of the current fiscal had projected the industry to see a new increase of at least 150,000 people, now this estimate comes under question.

Tata Consultancy Services (TCS), Infosys, Wipro, HCL Technologies, Tech Mahindra and Cognizant Technologies together employed 1,243,777 people at the end of the September quarter. In the first quarter these firms together employed 1,247,777 people, this translates to a net reduction of 4,157 employees.

The six IT companies together employed 59,940 new employees in the first half of 2016-17. These companies together had employed more than a fourth of the 3.9 million people working in the industry.

Cognizant, Infosys, Wipro and Tech Mahindra saw their workforce decline, while TCS and HCL saw a marginal increase in hiring in the April-September period.

The report says that reason for a slowdown in the growth of hiring in Indian IT firms is the change in business model as these companies have started working on newer technologies such as cloud computing, which needs fewer employees. Many of them have adopted automated tools that perform mundane tasks that were earlier performed by an army of engineers.

Another issue the Indian IT industry is faced with the US H-1B visa which the government under US President Donald Trump has imposed restrictions upon.

The 10 largest IT firms in India added 205 employees in April-June period, to take their total workforce to over 1 million employees at the end of June 2017.

ALSO READ:

Can govt's focus on job creation help Indian IT sector?

Govt admits that India's IT sector is now creating less and less new jobs