India’s information technology services industry would see a hiring freeze this year and executives would be cut by 20-25% in wages due to the negative impact of the coronavirus pandemic, said Mohandas Pai, a veteran of the IT industry. The former Chief Financial Officer of IT services major, Infosys Ltd, said the IT industry has done a “fabulous, unbelievable and remarkable” job in transitioning more than 90 per cent of its employees to work from home. It has achieved this task by setting up infrastructure at home, taking permission from their clients, and making sure that “security and oversight are there. The chairman of the private equity fund Aarin Capital and Manipal Global Education have declared that 25 to 30%, perhaps more, of the employees of IT companies will continue to work from home on a rotating basis, even after the closure of the caused closure by the coronavirus and the situation returns to normal. Speaking to P T I, Pai said he does not expect demand for office space in the IT sector to decrease in the future, as businesses now have to maintain social distance in their small offices.
“Now with social distancing, you need more space per person. So, 25 per cent working from home will provide additional space. I think space in the offices for people would get bigger; so for the next one year, the market (office space segment) could be very soft, and then it will grow at the normal pace”– Mohandas Pai
“Secondly, if people leave, I don’t think they will fill up the backlog, because this quarter and next quarter, the market is going to be soft. All the clients are in the West, they have not opened their offices yet, they are still going through the pains. So, I think next year there is going to be recruitment, this year will be soft, they (IT companies) will not grow in (terms of) people,”he added.
“There will be salary cuts. There will be promotions but not increments in salaries for most people. For senior level they will cut salaries to adjust costs. People getting Rs 75,000 to Rs one lakh and above per month, they will see salary cuts, may be 20-25 per cent,”he added.