Impending Slowdown In the Information Technology Sector

Table of Contents

The manufacturing industry in China has written the country’s growth story. They were able to create the cheapest goods and take over as the world’s factory because of their robust infrastructure. Similar to this, India’s service sector has mainly shaped the country’s growth story. Information technology companies are widely represented among these service sector businesses. India serves as the world’s technical support helpdesk if China has become the global factory.


Nearly two decades after this industry was established and commercial growth began, it appears to have reached a plateau. There are numerous news stories about the potential stagnation or perhaps slowdown of the information technology sector in the Indian newspapers. This article will assess whether this is in fact a policy and how it would impact the overall economy.

Indian Business Forecaster

The information technology sector is vital to India’s economy. The majority of jobs in the nation are produced by these companies. Thanks to the growth of the higher middle class brought about by employment in the information technology sector, new cities have been built. Information technology companies with adequate capital, like Infosys and Tata Consultancy Services, have a big impact on the Indian stock exchanges. Therefore, a slowdown in any of these companies is likely to result in a stock market meltdown.

Strung Tighter Purse Cords

Since its inception, Indian information technology is currently experiencing a global crisis. A crisis in America earlier was countered by booming industry in Europe and other places. But just now, it appears as though the entire world is about to slow down. The top four information technology markets—the US, UK, Europe, and Australia—are coping with impending prospects of a slowdown. None of these nations’ multinational firms do not experience the same level of growth as in the past. They have thus reduced their spending on information technology as well, which has slowed down business.

Lack of Interest in Body Shopping

For the incumbents, the early days of the information technology industry meant easy money. They didn’t bring any value. Instead, the value was only created by moving existing jobs from developed to developing countries, like India. Because of labor cost arbitrage, the lower labor cost gave the company a competitive edge. The market for these services became saturated over time as the Indian workforce increased to millions of people. The nature of business has altered in the current market. Body shopping is no longer a recognized commercial strategy. Companies in the information technology industry are struggling to resolve this problem. It’s hard to find new contracts for low-skilled jobs. Even the old ones are pretty much disappearing.

Lacking the Tools for Innovation


Currently, the IT industry is having trouble growing. Innovative industries like artificial intelligence and robotic process automation hold the key to this sector’s future. Indian businesses haven’t really advanced in these areas. Businesses like Infosys and TCS have been directing a significant portion of their budgets towards these more recent opportunities. A breakthrough has not yet been made, though. When it comes to high skill and high value information technology business, Indian companies continue to fall behind. This led Infosys to appoint Vishal Sikka as its CEO, an outsider with extensive experience in automation. However, a CEO alone cannot alter a company’s culture. There still has to be a focus on identifying and cultivating expertise in these more recent technologies. These multibillion-dollar companies may suffer if they are unable to adapt to the times. Those who do not adapt to the changing nature of the industry will quickly become obsolete.

A Pool of Redundant Employees


A large number of employees these Indian companies have may eventually become a liability. Robotic process automation has led to the creation of tools that are fast forcing people to perform mundane tasks for no reason. This suggests that these companies will either have to right-size fast or perish due to labor costs. It won’t be easy to right-size either. The government of India imposes stringent labor laws that make layoffs costly. Due to the potential harm to these companies’ reputations and the related lawsuit costs, it will be very difficult. A substantial percentage of the workforce also lacks any technological expertise. Many of them are project managers who have experience as general managers. These workers are categorized as middle management. As a result, their pay is crucial. Educating these workers to be productive will be a problem for Indian IT companies.

Finally, Indian information technology is no longer cutting-edge. It’s getting harder and harder to make money. Price reductions by competition have made profitability more difficult. Customers are currently very cautious when hiring new employees. The new era in this business will challenge the status quo and make survival a challenge. Besides that, EduBridge is doing its part by producing the most qualified workforce in the IT business. Learners from all backgrounds are becoming much more employable because of EduBridge’s platform which has a robust curriculum, and effective teaching methods. It is time for us to acknowledge the evolving situation and be a part of this change so that we can make our contribution in this new era of Information Technology.

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