This massive lay off exercise will be carried out by 2022. The move will help these companies save a whopping $100 billion mostly in salaries annually and robot process automation (RPA) up-skilling, according to a report.
“TCS, Infosys, Wipro, HCL, Tech Mahindra and Cognizant and others appear to be planning for a 3 million reduction in low-skilled roles by 2022 because of RPA up-skilling,” the Nasscom report says.
“This is a $100-billion in reduced salary and other costs, but on the flipside, it offers a likely a $10 billion boon for IT companies that successfully implement RPA, and another a $5 billion opportunity from a vibrant new software niche by 2022. Given that robots can function for 24 hrs a day, this represents a significant saving of up to 10:1 versus the human labour,” says the report.
Meanwhile, the report has also claimed that emerging economies mostly India and China face the most risk of technology driven disruptions which can impact up 85 per cent of jobs in countries like Kenya and Bangladesh. India and China are at greatest risk of skills disruption, while Asean, the Persian Gulf and Japan are at the least risk.
The domestic IT sector employs around 16 million, of them around 9 million are employed in low-skilled services and BPO roles, according to Nasscom.
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 RPA, the report says, according to PTI.
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 it the RPA will have the worst impact in the US with a loss of almost 1 million jobs, according to a Bank of America report on Wednesday.
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.