BRACE YOURSELF

Machines Vs humans: The battle for jobs in India is affecting not just IT engineers

Quartz india
Quartz india

The world’s fastest growing major economy is battling a jobs crisis. Some of the top industries that create millions of jobs every year in India are letting people go. The IT crisis has already sparked fears and other sectors like financial services and infrastructure, too, are staring at layoffs.

The scenario is worrisome, particularly at a time when India is expected to be home to the world’s largest young working age population by 2020. New job creation among labour-intensive sectors in the Asia’s third-largest economy has dropped significantly. Given the questionable quality of training of young graduates and weak growth in the number of low-skilled jobs, the future, too, looks bleak.

“Inadequate low-skilled job opportunities outside agriculture, and a widening skills mismatch in the formal sphere, are disquieting. Then there is the threat of automation impacting existing jobs in many of India’s high employment-generating sectors such as textiles, food processing, and information technology, and information technology-enables services,” ratings firm Crisil said in a report last week.

By 2021, four out of every 10 jobs lost globally to artificial intelligence and increasingly sophisticated technology will be in India, according to PeopleStrong, an HR tech solutions firm. Some 69% of the jobs in India are under threat from automation, according to the World Bank.

For many sectors, the future is already here.

IT

India’s $150 billion IT industry is bearing the brunt of automation with mid-level professionals being rendered redundant. Already, companies like Cognizant and Infosys have reportedly laid off a cumulative 15,000 employees.

IT business leaders acknowledge the elephant in the room.

In February, Infosys CEO Vishal Sikka had said that automation was the way ahead. “Instead of 10 people, what if we have three people to work on it. If we don’t have the software, then some others will take the advantage,” Sikka had said.

The job losses have stirred a fledgling movement towards unionisation, with IT professionals approaching labour regulators in multiple cities. Meanwhile, IT firms are being forced to hire local talent in key geographies like the US, squeezing out Indian professionals. Some companies and industry bodies are focusing on re-skilling employees in new technologies and processes.

Financial services

While IT sector layoffs have made headlines, others, too, are in the doldrums. Take financial services, for instance.

HDFC Bank, India’s largest private lender, saw the number of its employees drop by over 16,000 between October 2016 and March 2017. Blame digitisation.

“We have seen an increase in digital transactions, which has given us certain efficiencies linked to the digital channel. We have not replaced the staff that moved out due to attrition and have rebalanced our capabilities due to the increase in digital transactions,” Paresh Sukthankar, HDFC Bank’s deputy managing director, told the Economic Times newspaper in April 2017.

The worst hit would be those in mid-managerial positions as banks hire young, tech-friendly talent instead of re-skilling older staff, Aditya Narayan Mishra, CEO of CIEL HR Services told Moneycontrol in February this year.

Banks are also adopting artificial intelligence to improve customer service.

Manufacturing

With or without automation, some of India’s top manufacturing firms have been cutting jobs.

In 2016, Larsen & Toubro (L&T), India’s largest engineering and infrastructure firm let go of 14,000 employees—one of the biggest layoffs in the 79-year-old company’s history. “The digitisation and productivity enhancement initiatives taken by us boiled down to redundancies of roles and we have been able to shed as a group 14,000 in the six months to September (2016),” R Shankar Raman, L&T CFO, had said in November 2016.

L&T is not alone. On May 23, Tata Motors, India’s largest automaker, said it had cut 1,500 managerial jobs as part of restructuring. While the exact reason for the move wasn’t mentioned, automation could be a reason. “We underwent a very detailed exercise in terms of the roles, the requirements and the fitment of the roles etc. It was a very comprehensive exercise which we rolled out over a 6-9 month period which also factored in performance and leadership qualities,” Tata Motors CFO C Ramakrishnan said.

In any case, automation is being rapidly adopted by the Indian auto sector. Maruti Suzuki, for instance, has already integrated robots—its factory in Manesar, Haryana, has 7,000 workers and 1,100 robots. Analysts have, however, said that workflows in the auto industry will always need human labour and that workers needn’t worry.

“The change will be dramatic, but unlike others who are making predictions on the future of the workforce, it will not be catastrophic. Jobs in industries such as IT, business process outsourcing (BPO) and financial services are not about to disappear, they are simply about to change,” explained Harel Tayeb, CEO of Kryon Systems, a New Jersey-based firm that provides automation services.

But that’s unlikely to soothe nerves anytime soon.

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