IT firms to layoff 3 million employees by 2022

According to a Bank of America report, domestic IT firms are expected to lay off 3 million employees by 2022. This will help the companies to save US$ 100 billion, most of which is spent in salary. Nasscom stated that domestic IT sector employs around 16 million people out of which 9 million work in low skilled services and BPO roles. 30% of these 9 million employees will be laid off by 2022 owing to RPA.

Around 0.7 million of the jobs are expected to replace by Robot Process Automation (RPA) while rest will be impacted due to other technological upgrades and up skilling. According to the report, RPA is expected to have worst impact in US with expectation of 1 million jobs.

Companies such as TCS, Infosys, Tech Mahindra, Wipro, HCL, Cognizant and others are planning to reduce the employees in roles with low skill by 2022 due to RPA up skilling. The report stated, “This is a USD 100-billion in reduced salary and other costs, but on the flipside, it offers a likely a USD 10 billion boon for IT companies that successfully implement RPA, and another a USD5 billion opportunity from a vibrant new software niche by 2022. Given that robots can function for 24 hrs a day, this represents a significant saving of up to 10:1 versus the human labor.”

Many countries that had off shored their work in the past are expected to bring back the jobs in their home countries, resulting in RPA driven job losses. The report further stated that emerging economies like China and India are to face most risk of disruption through technology, and can impact 85% of jobs in economies like Bangladesh and Kenya. ASEAN, Persian Gulf and Japan are at the least risk of skill disruption.