IT sector may cut 40K mid-level jobs
Technology services firms might trim about 40,000 mid-level jobs by 2020 as it continues to face cost pressures and is looking for ways to cut down on expensive resources and replacing them with other resources at the base of the lean pyramid.
According to a media report, mid-level professionals, i.e. those who have about 10-20 years of work experience, account for about a fifth of the entire workforce across various IT companies. That accounts for about 6,00,000 professionals in total which results in 7 percent of mid-level IT jobs that could be eliminated in the next 12 months. Indian IT firms usually have a typical pyramid type of organizational structure which includes a wide base of employees that cost less per head, the middle level team includes experienced professionals, and the top level of the pyramid includes senior-level decision makers.
As the IT sector is experiencing a slowdown and companies are looking to cut costs in the middle, where employees tend to be experienced in traditional services, companies are looking to cut those job roles and concentrate their resources on those professionals with expertise in new-age digital skills.
The Indian software industry has reported about $137 Bn in exports in FY19 that employs about 3 million people. While the top six Indian IT services firms bring in a revenue of more than $60 Bn and employs more than a million employees. Application development and maintenance are the types of IT services that are seeing a rise in revenue. However, the digital services business is growing faster--in double digits.
Thus, the IT sector is funneling its efforts and resources towards digital skills and services business as a way to survive the economic slowdown.