India's $150 billion IT industry is one of the biggest employment generators, accounting for around 3.5 million white collared jobs in the country. However, the IT industry is experiencing tectonic shifts amid rising competition and increasing trend of automation.
A report from US research firm HfS Research says that automation has put to risk 6.4 lakh low-skilled jobs - or nearly one in five jobs - in India's IT and BPO sector in next five years. At biggest risks are more routine or repetitive tasks in the IT sector.
Automation is already making its presence felt in the Indian IT industry. Indian outsourcers are no longer relying on an army of technology workers to drive up their revenue growth.
"India has enjoyed hyper-growth in its services industry for over two decades now, and this is the first time a decline is now setting in, in terms of worker numbers. Its leading service providers will maintain high margins for several years to come, but their growth through linear employee scale addition is on the slide," wrote Phil Fersht, CEO and chief analyst of HfS Research, in a blog post.
However, job losses caused by automation are creating new opportunities in higher value work, says HfS Research. The research firm predicts that 1.6 lakh new jobs would be created in India's IT and BPO sector that require medium to high-value skills.