Nearshore Americas
India BPo

India’s IT/BPO Industry Faces Large Scale Layoffs

India’s IT services and BPO industry has laid off 30,000 employees, in addition to asking around 60,000 staff to go on indefinite leave without pay, according to the country’s business news channel CNBC TV18.

More jobs will be lost in the second financial quarter, the broadcaster has warned, citing unnamed sources in the industry.

With more than 4.5 million employees, India’s IT/BPO industry is quite large in size but heavily dependent on economic conditions in developed countries, including the United States and Europe.

The jobs on the chopping block account for less than 2% of the industry’s total workforce.

Large tech companies, such as TCS and Infosys, have not yet resorted to firing any workers but are slashing employee salaries by 15% and 20%. Wipro Chairman Rishad Premji has vowed that he would not fire a single employee until the pandemic disappears.

When India went on a month-long lockdown earlier this year, the IT companies managed to continue their operations, thanks largely to their ability to transition most of their staff to a remote-working environment in a short period of time.

They survived lockdowns, but many of their clients did not. Considering the report, some clients of IT providers are delaying payments, and a few others are seeking to renegotiate the contract price.

Sign up for our Nearshore Americas newsletter:

Today, the employees facing the prospect of going on furlough are those servicing clients representing industries such as auto, retail, manufacturing, hospitality, and tourism.

The worst-hit are BPO startups, who are firing employees on a massive scale.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.