Will Layoffs Occur in Indian IT Companies During the Coronavirus Crisis?

The current global pandemic has had a profound impact on employment across various sectors, with the Indian IT industry being no exception. When it comes to major players such as Accenture, TCS, Infosys, Amazon, and CTS, the question of layoffs and salary adjustments arises. This article explores the potential impact of the coronavirus on employment and salary trends within the Indian IT sector.

Layoffs: A Potential but Highly Dependent Scenario

While layoffs are a possibility, the situation is far from certain. The extent of any layoffs will depend on specific factors such as the domain and business unit within each company. Some sectors and business units may experience a decline in project injections, leading to potential layoffs. However, other areas may not be as affected and could even see an uptick in demand.

Impact on Project Demand and Skill Sets

Unfortunately, the immediate future is likely to see a reduction in project availability for many IT professionals. As companies prioritize essential services and cut non-essential costs, IT projects that do not align with immediate business needs may be sidelined. Due to this downturn, professionals may find it increasingly difficult to decline unsuitable projects for the next 2 to 3 quarters. This situation is particularly challenging for individuals seeking to work on projects that do not match their skill sets.

Salaries: Expect Limited Hikes - If Any

One of the immediate and direct impacts of the coronavirus on the IT industry is the likely stagnation or slowdown in salary hikes. Across the majority of the workforce, expect very limited (if any) increases in salary. Companies are likely to focus on conserving funds and maintaining their liquidity, which may result in fewer or no salary hikes in the near future.

Variable Pay and Performance Bonuses in Question

Another aspect of potential financial changes is the impact on variable pay, such as performance bonuses or variable pay components. Senior and mid-senior level employees may see a decline in these bonuses, reflecting the challenging times ahead. Companies are likely to prioritize cost management and focus on more critical areas that directly support the organization's core functions.

Offshore and Onshore Roles: A Different Outlook

There may also be differences in the treatment of offshore and onshore roles. Onshore resources, despite being crucial to many organizations, may not receive extensions or additional projects unless they demonstrate exceptional performance. On the contrary, offshore roles might see more stable employment opportunities as organizations prioritize maintaining remote working arrangements to minimize disruption and costs.

Corporations' Precautions During the Pandemic

Certain corporations, including TCS and CTS, have made public announcements regarding their commitment to retaining their workforce. These companies recognize the importance of maintaining morale and sentiment among their employees. They understand that laying off employees now would negatively impact their brand value and long-term stability. TCS, specifically, has taken measures to ensure that they do not diminish the employee base. This approach underscores the collective effort of major organizations to protect their employee relationships and maintain their reputation.

Forward-Looking Insights

While immediate layoffs are not an absolute certainty, the landscape for employment and salary adjustments in the Indian IT sector is expected to transform over the next 3 to 6 months. Companies are likely to reassess their strategic priorities and adjust hiring, project allocation, and recruitment processes accordingly. It’s crucial for IT professionals to stay informed about industry trends and to be prepared to pivot their career strategies as necessary.

Conclusion: The impact of the coronavirus on the Indian IT sector is complex, with layoffs, reduced salary hikes, and changes in variable pay being potential outcomes. However, large corporations like Accenture, Infosys, TCS, Amazon, and CTS are taking steps to mitigate harmful impacts and prioritize their workforce. Staying informed and adaptable will be key to navigating these challenging times.