Automation has already begun taking toll on India’s labor-intensive IT services industry. According to a report from stock brokerage Centrum Broking, the country’s top five IT firms trimmed their hiring numbers by about 25% to 77,365 people in 2015 as the result of their aggressive automation strategies.
The report does not confirm whether these firms fired any of their employees following automation of their service, but it points to a sharp decrease in recruitment. The software firms the report refers to are TCS, Infosys, Wipro, HCL, and Cognizant.
The report also notes that the drop would have been much higher had it not been for Infosys, which added a record 23,745 people to its payroll in the year.
Across the world, artificial intelligence is increasingly performing “repeatable tasks,” replacing thousands of employees. According to industry insiders, automation and AI systems might help IT companies cut costs on productivity, infrastructure, and consumption of resources between 30%–40% percent.
Automation is likely to decrease demand for engineers performing jobs such as coding, back office maintenance, and applications testing. According to Centrum Broking, Cognizant Technologies added 71% fewer employees last year as the IT firm began ramping up its automation strategies to cut back on its production cost.
“Software vendors across the pack are focusing on automation, and we believe that [fiscal year 2016] will be an inflection point,” the report noted.
In other words, the report says that the effects of automation will be widely visible to see this year and that in 2017 some IT vendors will focus on re-training their employees in new skills.
“With automation enabling improved delivery efficiency and productivity, the IT sector could be facing a scenario of lower net additions in FY17/FY18,” the report added.
It seems universities and education experts have already taken note of it. The All India Council for Technical Education (AICTE), India’s technical education regulator, has weeded out 757 technical courses, saying it wants to groom engineers who fit into industry requirements.