Job Cuts in India : 3 Reasons why 6 lakh IT professionals to lose their jobs

“Yes you heard it right”, six lakhs IT professionals to lose their jobs in the next three years.This will lead to  huge number of job cuts in India in the next coming three years.

According to the executive search firm “Head Hunters India” founder, chairman and MD-K Lakshmikanth told PTI.

That “Job cuts in India for IT sector will be between 1.75 lakh and 2 lakh annually for next three years”, shocking right.

Yes, I know it is, if you are an IT student pursuing or you are an IT professional it must have left you terrified.

The questions such as how could this happen to the IT sector, why it is happening with the IT sector only, so if it was happening so why the world was advising me to go for IT as my career and bla bla bla, would have started hitting in to your mind.

Some of you would also be thinking that the industry which employs around 4 million professionals in India and rakes more than $150 billion in revenue, how could go through this bad phase.

So don’t worry, I am going to explain you in detail that what are the reasons for these much job cuts in India. And what steps have been taken by the Govt. Of India to tackle this problem of high number of job cuts in India.

Job Cuts in India.

There are three big reasons, why IT sector in India is going through such a bad phase.


Job cuts in India

A report stated that 14% decline in job cuts in India’s IT workforce with 4,80,000 jobs at risk by 2021 due to automation.

For some people Automation has come as “blessing” and for some it has arrived as “Job Cuts”.

As the companies have started using the “AI Machines” to do the work which needed people to do it earlier, the humans are replaced by these machines.

Because these machines needs only one time investment.  A periodic low budget maintenance is a very cost-effective choice for the companies compared to the manpower in terms of money. Which led to high number of job cuts in India.

So the professionals whose works can be automated and can be programmed to be done by an AI Machine are at the verge of losing their jobs in next three to four years.

So you must have started thinking that, what kind of jobs are going to be affected with the Automation. And whether your job category falls under this “AI Umbrella” or not ?

The Jobs which include repetitive work or a fixed pattern of work, those are the jobs which are going to be replaced by the automation.

Jobs Most At Risk Of Being Replaced By Robots

2).“H-1B” Visa Clamping by Trump Govt.

Job cuts in India

Clamping down on “H-1B” visa by trump’s government has made job cuts in India situation worse.

Now you may be thinking that what “H-1B” visa stands for and why it is affecting the IT sector of India.

Let me explain you about “H-1B” visa in brief. It is a way through which American companies hire highly skilled foreign professionals in USA.

Trump’s government came up with a policy named “To BUY American and To HIRE American”.Which led to less hiring of indian professionals, that indirectly led to job cuts in India.

  The large number of people from India used to go to America for work at lower wages.So it was causing problems such as un-employment or under-employment to the local USA people.

So the government made a team to review the process. And to find out that how American companies are using this “H-1B” visa policy wrongly.

And they found that more than 85% people who were hired from abroad were working at the lowest wage. Which was allowed to be given to the foreign professional in order to work in America.

So the bureau stated that American companies were hiring people from abroad. Not because they were highly skilled.But because they were ready to work at very low wages. Compared to the local IT professionals in America.

India got nearly 70% of “H-1B” visas in 2015 as per US Department of State Bureau of Consular Affairs.

The US government tightened the “H-1B” visa policies. And started keeping an close eye on the companies who were hiring foreign professionals.

Which has led to decline in hiring of Indian professionals in America. And has affected adversely to job cuts in India.

Because now the number of professionals who used to go abroad have no choice. Other than to stay in India and work here. They are forced to apply for the jobs in India. Which has led to increase in job applicants for the same positions.

3).High in number, Low in quality (Engg. Institutes)

Job cuts in India

 “My son will become an engineer”, this oldschool mentality has led to this situation. The situation of  highly job cuts in India in the IT sector.

You will be surprised to know that, In India 15 lakh engineering students graduates every year.

Yes, you heard it right it’s “15 Lakh Students” every year.

Now the problem is not that, 15 lakh students are graduating every year. The problem is that from them only 5 lakh students gets absorbed in the market.

So what happens with the rest, the rest remains either un-employed or under-employed.

Until and unless parents will stop forcing their childrens to go and get an engineering degree. This problem of job cuts in India is not going to come to an end.

Let me explain you the scenario of engineering in India in brief.

Under AICTE, more than 3,288 engineering colleges are there in India today. In 2006-07 there were only 1,511 so you can yourself see that it has just doubled from what it used to be.

The number of IIT’s were just 7 in 2005 and now in 2017, there are total 23 IIT’s.

I am pretty sure that these stats must have blew your mind. And would have given you the reason for the situation of high job cuts in India.

But let me tell you, more number of engineering institutes are not the problem. The problem is the increasing number of low quality engineering institutes.

The engineering institutes, who have just arrived to distribute the degrees to the students.( A certificate which will help them to apply for job and nothing more) [Top 10 High Paying Tech Jobs That Don’t Require a College Degree]

That is the biggest problem of all, because then these institutes produces un-skilled professionals. In the highly competitive and rapidly changing job market.

And obviously, these students remain un-employed.

*** Steps Taken By The Government To Solve The Job cuts In India Crisis ***

 The good news is that the government of India and HR Ministry Of India is aware of the problem. And they have started some good initiatives to solve job cuts in India. They are also planning to implement some good policies in order to tackle the problem of job cuts in India.

AICTE has proposed that nearly 50% bad and low quality engineering institutes are going to be shut downed in coming years.[learn more about this]

If this happens then the quality of engineers in the market will improve. And so as the employment ratio for the engineers.

To tackle the under-prepardness of students and lack of exposure to practical work. Government has started the “SkillTrainIndia” program.[Learn More About This]

This program will allow students to go and get their hands on practical work. And get some good skills, which they can use in their working career.

Central government has been planning to make 3 internships compulsory in the curriculum of Btech. So that the students will get a real world working sense and exposure to the newer technologies.[Learn More About This]


New age students should not focus upon earning good grades and then getting a secure job. Instead they should focus upon working on their skillsets. They need to adapt the technologies and trends very fast and then approach their way accordingly.We need leaders more than job seekers in India.[7 Things About Business That You Should Know]

Students and parents should not only focus upon the selected streams such as Engineering, Medical and CA. But they should also give importance to other streams such as non-technical fields.


Tell me in the comments that how do you think that this problem can be solved. And what the government and students should do in order to solve the problem of job cuts in India in the IT sector.