On Thursday, reports said that with automation taking place at a much higher pace across the industries, especially in the tech space, over three million employees could slash their jobs by the next year (2022).
This slash would help them save a whopping USD 100 billion in salaries annually. According to Nasscom, out of the 16 million employees, nine million are employed in low-skilled services and BPO roles, and out of these nine million low-skilled workers and BPO roles, 30 percent or around 3 million employees would lose their jobs by 2022. This could be because of the impact of Robot Process Automation or RPA.
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Roughly 0.7 million roles would be replaced by RPA alone and the rest due to other technological advancements. According to the report by Bank of America released on Wednesday, the RPA would cause the worst impact in the US, where one million people would lose their jobs.
As per the reports, on average fully-loaded employee costs of USD 25,000 per annum for India-based resources and USD 50,000 for US-based resources, this slash would release around USD 100 billion in annual salaries and associated expenses for corporate.
The report read, “TCS, Infosys, Wipro, HCL, Tech Mahindra and Cognizant and others appear to be planning for a 3 million reduction in low-skilled roles by 2022 because of RPA up-skilling. This is a USD 100-billion in reduced salary and other costs, but on the flip side, it offers a likely USD 10 billion boon for IT companies that successfully implement RPA and another USD5 billion opportunity from a vibrant new software niche by 2022. Given that robots can function for 24 hrs a day, this represents a significant saving of up to 10:1 versus the human labour.”
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According to the reports, the global high-skill talent pool is shrinking and exposing in the developing economies (countries). The report further states that developing countries would also look to bring offshored IT jobs back and either use native IT workers or domestic software robots to secure their digital supply chain.
Software offshoring started in the year 1970s and in the 1980s, personal computers began to gain traction when the world’s major players began shifting focus to trade liberalization. The reports warned that major economies like Germany, China, India, Korea, Brazil, Thailand, Malaysia and Russia would likely face a labour shortage. The report also revealed that the countries like South Africa, Greece, Indonesia and the Philippines would have surplus labour for the next 15 years.