Tamil Nadu's IT, ITeS exports pick up pace in 2017-18, grow 8.55%

The value of information technology (IT) and IT-enabled services (ITeS) exports from Tamil Nadu, South India’s third-largest exporter in the segment in recent times, grew 8.55 per cent in 2017-18 over a year earlier to Rs 1,111.79 billion. This is a significant pick-up, given that the state, facing a decline since 2014-15, had reported a modest three per cent IT-ITeS export growth rate last year. Industry leaders from Tamil Nadu said the state’s exports in the segment had been growing at a higher rate than the national average and that was a good sign for industries in the state. The IT industry’s average growth rate for India, according to industry body Nasscom, is around seven per cent. 

According to the latest policy note for the information technology department, the state government has said that the exports from Tamil Nadu have grown to Rs 1,111.79 billion (estimated), compared with Rs 1,024.15 billion during 2016-17, when they had grown 3.3 per cent over Rs 990.95 billion the previous year. The estimated investment in the IT and ITeS industry grew to an estimated Rs 399.81 billion during 2017-18, as compared with Rs 367.04 billion the previous year. In 2015-16, the investments had been to the tune of Rs 299.98 billion, according to the government, which cited the Software Technology Parks of India (STPI) and the commerce ministry. Among southern and south-western states of India, Karnataka was the top exporter of IT products and services (worth Rs 2,025.94 billion in 2016-17), while Maharashtra was the second (Rs 1,215 billion) and Telangana fourth (Rs 851.76 billion).

IT woes: Indian engineers to lose 2 lakh jobs annually, says Head Hunters

Executive search firm Head Hunters India said the job cuts in IT sector will be between 1.75 lakh and 2 lakh annually for next three years due to under-preparedness in adapting to newer technologies.

"Contrary to media reports of 56,000 IT professionals to lose jobs this year, the actual job cuts will be between 1.75 lakh and 2 lakh per year in next three years, due to under- preparedness in adapting to newer technologies," Head Hunters India Founder-Chairman and MD K Lakshmikanth told PTI, analysing a report submitted by McKinsey & Company at the Nasscom India Leadership Forum on February 17.

McKinsey & Company report had said nearly half of the workforce in the IT services firms will be "irrelevant" over the next 3-4 years.

McKinsey India Managing Director Noshir Kaka had also said the bigger challenge ahead for the industry will be to retrain 50-60 per cent of the workforce as there will be a significant shift in technologies. The industry employs 3.9 million people and the majority of them have to be retrained.

ALSO READ: Carnage in Indian IT: Wipro, Infosys, Tech Mahindra, Cognizant slash jobs

"So, when we analyse these figures, it is clear that 30 to 40 per cent of the workforce cannot be retrained or re- skilled. So, assume that half of this workforce can continue to work on old skills, then balance will become redundant.

"So, the number of people who will become redundant in the next three years will be about five to six lakhs. This will work out to, on an average, between 1.75 lakh to 2 lakh per year for next three years," Lakshmikanth explained.

READ MORE

'IT sector to layoff up to 2 lakh engineers annually for next 3 years'

Executive search firm Head Hunters India said the job cuts in IT sector will be between 1.75 lakh and 2 lakh annually for next three years due to under-preparedness in adapting to newer technologies.

"Contrary to media reports of 56,000 IT professionals to lose jobs this year, the actual job cuts will be between 1.75 lakh and 2 lakh per year in next three years, due to under- preparedness in adapting to newer technologies," Head Hunters India Founder-Chairman and MD K Lakshmikanth told PTI, analysing a report submitted by McKinsey & Company at the Nasscom India Leadership Forum on February 17.

McKinsey & Company report had said nearly half of the workforce in the IT services firms will be "irrelevant" over the next 3-4 years.

McKinsey India Managing Director Noshir Kaka had also said the bigger challenge ahead for the industry will be to retrain 50-60 per cent of the workforce as there will be a significant shift in technologies. The industry employs 3.9 million people and the majority of them have to be retrained.

"So, when we analyse these figures, it is clear that 30 to 40 per cent of the workforce cannot be retrained or re- skilled. So, assume that half of this workforce can continue to work on old skills, then balance will become redundant.

"So, the number of people who will become redundant in the next three years will be about five to six lakhs. This will workout to, on a average, between 1.75 lakh to 2 lakh per year for next three years," Lakshmikanth explained.

However, he said job cuts will not take place in major cities like Mumbai or Bengaluru, but cities like Coimbatore or a few remote places, he said.

READ MORE

Indian IT eyes crores of rupees in revenue as firms rush to get GST-ready

India's information technology (IT) industry is likely to benefit in a big way as the goods and services tax (GST) roll-out leads to companies spending a few thousand crores of rupees in becoming GST-ready.

While many large businesses, with thousands of partners and customers spread across the country, are spending “significantly” to upgrade their IT infrastructure, the Union government will also invest in setting up the technology infrastructure for GST and its maintenance.

GST is slated to be rolled out from July 1 and will replace the existing tax compliance system for businesses.

“For the GST regime, businesses and organisations will have to upgrade the enterprise resource planning (ERP) and billing systems. It will be a very large and complex transformation and, therefore, it will create a huge opportunity for the IT services companies,” said Sanchit Vir Gogia, chief executive, Greyhound Research.

Gogia believes that it would not only bring in opportunities for technology services, but also for professional services to simplify the taxation and compliance processes for various organisations. In fact, technology services, professional services and necessary hardware upgradation put together, businesses may spend, Gogia added, few thousand crore rupees.

Infosys, India’s second largest IT services firm, bagged a five-year contract worth Rs 1,380 crore in 2015 to implement the GST Network — the nodal agency that will implement the technology and the IT backbone for the unified tax regime, along with the maintenance for it.
READ MORE

At least 9 months' pay! Cognizant top execs get voluntary separation option

Cognizant Technology Solutions has floated a voluntary separation option for its employees at the senior management level, at a time when the company is pushing for automation and digital technology and is in the process of trimming its workforce.

The Nasdaq-listed US-based company, which has most of its India operations in Tamil Nadu, confirmed the development. Other information technology majors did not respond to calls and emails from Business Standard on whether they were also considering similar schemes.

Cognizant said the option had been offered to senior executives — from director level to senior vice-president. Sources in the company said that those who had annual salaries in excess of Rs 40 lakh might also be eligible for the option. A minimum of nine-month salary will be paid as compensation under the initiative, depending on the executive’s post.

The IT firm said the move was related to its overall strategy to accelerate shift to digital and deliver high-quality, sustainable growth. The company will, however, continue to hire across all of its practices and is expanding facilities globally, ensuring that it has the “right expertise to help its clients”.

“As part of these initiatives, we are offering a voluntary separation incentive to some eligible leaders, representing a very small percentage of our total workforce,” said a company spokesperson.
READ MORE