IT Companies To Suspend Hiring This Year Due To Covid-19: TV Mohandas Pai
India's Information Technology industry would see a hiring freeze this year and salary cuts for senior executives due to coronavirus’ impact on IT sector, former Infosys CFO TV Mohandas Pai said on Tuesday.
IT companies would not hire more and will suspend recruitment, but will honour hiring commitments already made, Pai, who is chairman of private equity fund Aarin Capital and Manipal Global Education, told the Press Trust of India.
"Secondly, if people leave, I don't think they will fill up the backlog, because this quarter and the next quarter, the market is going to be soft,” Pai said.
“All the clients are in the West, they have not opened their offices yet, as 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.
"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 1 lakh and above per month, they will see salary cuts, may be 20-25 percent," he added.
Pai does not see pay cuts for staff drawing salary less than that.
Work From Home
The IT industry has done a "fabulous, unbelievable and remarkable" job in transitioning more than 90 percent of its employees to work from home, Pai said.
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", he said.
But not all employees will return to IT campuses after the lockdown brought upon by the Covid-19 pandemic is over. About 25-30 percent, may be more, employees of IT companies will always work from home by rotation.
Office Space Demand
Pai does not expect the demand for office spaces in the IT sector to shrink, going forward, because companies would now need to maintain social distancing in the workplace.
"Now with social distancing, you need more space per person. So, 25 percent working from home will provide additional space, he said. “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.”