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Wednesday 8 July 2020

Unemployment risk looms large on IT sector

But unemployment may not hit large companies as they do not want to lose their employees and they have money to pay, said R Chandrashekhar

If the lockdown is prolonged due to the epidemic of coronavirus disease (COVID), unemployment will hit the information technology (IT) industry — believes former Nasscom president R Chandrashekhar. He said today that ‘work from home’ can be a positive aspect in the long run. This will open new avenues for IT companies and will save their investment.

The former Nasscom head said that if the current situation were to worsen, there would be problems for startups. These firms are running out of funds received from venture capitalists, he said

Chandrashekhar said that big companies would not see unemployment for two reasons.

The larger companies may not be actually cutting jobs for two reasons. “One is that they do not want to lose their employees and they have money to pay,” he said.

Unemployment to hit temporary or intern employees

Chandrashekhar said even if some big companies go for retrenchment, they will remove temporary or intern employees. He said that as long as the budgets of these companies allow, they will not remove regular and permanent employees.

However, Chandrashekhar added that the rate of unemployment would depend on how long this situation lasted. “A month, two months or three months. After that, these companies will come under pressure too,” he said. Companies cannot continue to subsidise their employees, he added.

Chandrashekhar said client companies offering contracts to Indian IT firms, which are also undergoing similar experiences, may not object to working remotely. “Human behaviour (adapting work-from-home culture) changing is not easy,” he said.

Chandrashekhar said that employees were working from home in many countries of the world. “In the short term, it will have a negative impact on the industry. But in future, it will bring such a change in work culture, which IT companies in India have not yet experienced,” he said.

Chandrashekhar said that ‘work from home’ in future would save employee productivity, logistics cost and office space.

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