Rising Nationalism, Automation Devastate Once Booming India IT Sector
Mostly due to the increase in automation but also partly due to a rising sense of nationalism around the globe, the India IT sector is on the decline, big time.
2017 was a tough and transformational year for tech employees in India. Recently, it was announced that 56,000 jobs in the India IT sector were lost in 2017. This is double the number of jobs reported lost in the same sector for 2016.
India IT Sector Faces Unprecedented Job Loss
The 56,000 jobs lost by Indian engineers and other tech workers come from adjustments made by top IT firms in India. One company even put 3,000 senior managers on notice. And these are not just local firms, but include French and American multinational companies too.
To be sure, some of these layoffs are the result of poorly performing hires. But as Quartz reports, this figure has traditionally been 1.5 percent or less of the workforce. Last year’s firings impacted about 6 percent of the workforce.
Some years back, India’s $160 billion IT industry was already hit by business processing outsourcing jobs being transferred to Vietnam and the Philippines. With this additional setback, Prime Minister Modi’s government will be burdened with the added problem of keeping a skilled and educated labor force gainfully employed.
Managers of these companies admit that they were slow to see the impact job automation and protectionist policies would wreak on their sector. The rise of cloud computing and smart systems means that IT projects need far fewer engineers and techs to tackle and complete projects. With the shift in requirements comes the realization that schools and training programs in India were not able to anticipate the impending shift, and now, there are even more unqualified tech school graduates in addition to those let go.
Nationalism Grows Worldwide and Threatens India IT Sector
Adding to the threats posed by automation to jobs in the India IT Sector is the growing sense of nationalism in the United States and other countries.
Many countries are revising and limiting their foreign worker visas.
In the United States, President Trump’s protectionist policies and more rigid appraisals mean that a lot of Indian H1-B visa holders need to go back to India. Many being asked to leave for their home country are engineers with 6-8 years’ experience.
For American tech workers, the more stringent work visa requirements means that there will be more opportunities for them on the local job market. On the other hand, those expelled and experienced engineers will find jobs in other countries making those countries more competitive due to talent influx.
As Quartz reports, Australia and New Zealand have also revised and imposed more stringent standards on their visa programs in an effort to curtail foreign workers. The U.K. and Singapore have also become increasingly less friendly to the India IT sector and its employees.
Ultimately, analysts say even despite countries’ moving towards stricter visa regulation, mass layoffs would still have been inevitable. The Hindu Business Line reports automation is expected to render nearly 70 percent of India IT sector jobs irrelevant in 2018.
Without a doubt though, the increase in nationalism around the globe is having an impact. The total number of jobs lost in the India IT Sector would have been less.
The 56,000 jobs lost to Indians may not translate to the same number of jobs created on American soil. But if even a fifth of that number results in jobs generated for Americans, it will be a win for the current administration.