Economic Times reports that Indian software companies
dramatically improved their ability last year to earn more revenue while
employing fewer people, reflecting the major transformation underway in a
sector that has created a new middle class in India. While the development is
good news for information technology companies, it is also a warning sign for
employees in the software industry and for students looking to make a career in
an industry that used to hire thousands of employees every year.
Between April 2013 and March 2014, the IT industry
added only 13,000 employees for every billion dollar of revenue, according to
data from software industry grouping Nasscom. During the year to March 2013, it
needed 26,500 employees. "We are moving up the value chain, getting more
dollar for every hour of work. And more automation of existing work means we
are hiring less and less to achieve the same growth," said Achyuta Ghosh,
head of research at Nasscom.
This is good for businesses but not for job creation
in a country with the population that India has. How will the Indian middle
class expand at this rate? Is it that India also needs companies that provide
services at the lower end of the value chain to create jobs?
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