Job losses may be not be as bad as feared, say analysts
The IT sector may go through a temporary setback during the first half of FY21, but is expected to recover during the second half, said analysts and executives at leading firms.
There could be job losses at mid and small-tier companies, but it won’t be significant, they said.
“While the scare of rising global infection and death is still playing out, investors seem to be ignoring some of the positives such as the quick bounce-back in China after the flattening of the Covid-19 curve,” said Anand Rathi Research in a note to investors.
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The note said that Indian IT growth in FY21 could be 3 per cent lower, assuming a recovery in the second half of FY21 and, therefore, may not see a reduction in headcount. Most IT companies have responded to the crisis by moving 90 per cent delivery home, resulting in 5 per cent loss in productivity days.
Some of the top executives at major IT firms across the country, who did not want to be named as some of these companies have slipped into the silent period ahead of the Q4 results, said that there could be a short-term impact on the revenues, but in the long term certain deals may get re-sized.
Source: The Hindu BusinessLine
