Automation To Reduce Up To 3 Million Jobs In IT Firms By 2022, Says Reports
According to the reports, with automation taking place at a much faster pace across industries especially in the tech space, domestic software firms that employee over 16 million are set to slash headcounts by a massive 3 million by 2022, which will help them save a whopping
$100 billion mostly in salaries annually.
According to Nasscom, the domestic IT sector employs around 16 million, of which around 9 million are employed in low-skilled services and BPO roles.
According to a Bank of America report, of these 9 million low-skilled services and BPO roles, 30 per cent or around 3 million will be lost by 2022, principally driven by the impact of robot process automation or RPA. Roughly 0.7 million roles are expected to be replaced by RPA alone and the rest due to other technological upgrades and upskilling by the domestic IT players, while the RPA will have the worst impact in the US with a loss of almost 1 million jobs.
Based on average fully-loaded employee costs of $25,000 per annum for India-based resources and $50,000 for US resources, this will release around $100 billion in annual salaries and associated expenses for corporates, the report says.
The key reason for the RPA-driven job losses is that many countries that had offshored their work in the past are likely to bring the jobs back to their home markets.
However, despite such massive automation, major economies like Germany (26 per cent shortage), China (7 per cent), India (5 per cent) Korea, Brazil, Thailand Malaysia and Russia will likely face labour shortages, warns the report, adding on contrary South Africa, Greece, Indonesia and the Philippines will have surplus labour for the next 15 years.
