The advent of automation is about to take a hit on jobs in the technology sector. Indian software companies that employ more than 16 million people are likely to extend pink slips to nearly 3 million employees by 2022 to save approximately USD 100 billion mostly in salaries each year.
According to a report by NASSCOM, out of 16 million people employed in the domestic IT industry, 9 million of them are working in low-skilled services and BPO roles. Out of these 9 million low-skilled jobs and BPO designations, 30% (or nearly 3 million headcounts) is expected to be lost by 2022 owing to the impact of robot process automation (RPA).
A study by Bank of America mentions that almost 0.7 million roles are projected to be replaced by RPA and the rest due to frequent technological upgrades by domestic IT giants. RPA is slated to largely affect the US industry by claiming nearly 1 million jobs.
Citing sources, on average a full-time employee costs USD 25,000 annually for Indian resources and approximately USD 50,000 for US resources, this will release almost USD 100 billion in annual salaries and other expenses for corporates.
Prominent Indian technology companies like Tech Mahindra, Cognizant, Wipro, TCS, Infosys, and many others are aiming for a 3 million cutback in low-skilled roles by the end of 2022 due to increasing adoption of RPA.
As per a recently published report, the USD 100-billion in reduced salary will, in turn, offer a USD 10 billion boon to the IT firms that have adopted RPA and other USD 5 billion added opportunity for an advanced software niche by 2022.
In addition to above, since robots can function for 24 hours a day, this showcases a considerable saving of nearly 10:1 in contrast to human labor.
Notably, another major factor behind the RPA-led job losses is that many nations that have offshored their work earlier are bringing jobs backs. Developed countries are seeking to bring back the offshored IT roles and use native IT employees or domestic software robots, putting the Indian IT jobs at risk.