IT job cuts: Up to 600,000 engineers likely to be laid off in next 3 years

McKinsey & Company report says half of IT workforce will be irrelevant over the next 3-4 years

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Executive search firm Head Hunters India said the job cuts in IT sector will be between 1.75 lakh and 2 lakh annually for next three years due to under-preparedness in adapting to newer technologies.

“Contrary to media reports of 56,000 IT professionals to lose jobs this year, the actual job cuts will be between 1.75 lakh and 2 lakh per year in next three years, due to under- preparedness in adapting to newer technologies,” Head Hunters India Founder-Chairman and MD K Lakshmikanth told PTI, analysing a report submitted by McKinsey & Company at the Nasscom India Leadership Forum on February 17.

McKinsey & Company report had said nearly half of the workforce in the IT services firms will be “irrelevant” over the next 3-4 years.

McKinsey India Managing Director Noshir Kaka had also said the bigger challenge ahead for the industry will be to retrain 50-60 per cent of the workforce as there will be a significant shift in technologies. The industry employs 3.9 million people and the majority of them have to be retrained.

“So, when we analyse these figures, it is clear that 30 to 40 per cent of the workforce cannot be retrained or re- skilled. So, assume that half of this workforce can continue to work on old skills, then balance will become redundant.

“So, the number of people who will become redundant in the next three years will be about five to six lakhs. This will workout to, on a average, between 1.75 lakh to 2 lakh per year for next three years,” Lakshmikanth explained.

However, he said job cuts will not take place in major cities like Mumbai or Bengaluru, but cities like Coimbatore or a few remote places, he said.

Lakshmikanth further said the IT services industry is passing through an uncertain time as the growth in digital technologies like cloud-based services is happening at a much faster pace and the companies are combining learning of some of the new technologies and reskilling.

“Because of the changing technology, the most affected will be the professionals aged 35 and above, for it would be very difficult for them to get jobs,” Lakhsmikanth said. | READMORE…

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At least 9 months’ pay! Cognizant top execs get voluntary separation option

IT major expects process to be concluded by the end of the second quarter

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Cognizant Technology Solutions has floated a voluntary separation option for its employees at the senior management level, at a time when the company is pushing for automation and digital technology and is in the process of trimming its workforce.

The Nasdaq-listed US-based company, which has most of its India operations in Tamil Nadu, confirmed the development. Other information technology majors did not respond to calls and emails from Business Standard on whether they were also considering similar schemes.

Cognizant said the option had been offered to senior executives — from director level to senior vice-president. Sources in the company said that those who had annual salaries in excess of Rs 40 lakh might also be eligible for the option. A minimum of nine-month salary will be paid as compensation under the initiative, depending on the executive’s post.

The IT firm said the move was related to its overall strategy to accelerate shift to digital and deliver high-quality, sustainable growth. The company will, however, continue to hire across all of its practices and is expanding facilities globally, ensuring that it has the “right expertise to help its clients”.

“As part of these initiatives, we are offering a voluntary separation incentive to some eligible leaders, representing a very small percentage of our total workforce,” said a company spokesperson.

Asked about the compensation, the spokesperson said, “We believe it provides a fair and positive experience for those choosing to leave.” He didn’t disclose any details. (READMORE…)