STEELWORLD – OCTOBER 2022

Editorial – October 2022

The global IT industry headquartered in the US, has started job cuts on massive scale. Yes, the same IT industry which attracted millions of youth by its huge packages, designer offices, lavish and free working environment, is struggling to survive today. The job cuts have mainly happened in the US which is a clear sign of recession being just round the corner. I am sure the job cut wave will soon hit the Eurozone too. In the last few years IT sector had become an integral part of ‘The Great American Dream’ of almost every teenager across the world and this sector was seen as the ‘gateway to the US’ for a quality and wealthy lifestyle.

In the pandemic period this sector first started the concept of ‘work from home’ on a mass scale and saved millions which were being spent on the infrastructure and employee welfare. If one scans through the balance sheets of IT companies, surprisingly many have shown rise in the profits in this period, not by increasing the business but by reducing the costs. Again, I am not saying that this recession will dent the IT sector permanently but it’s impact will surely be felt till the world completely comes out of the recession tunnel. I do understand that one can not imagine a world without IT or ITES. Such is its impact on all walks of life !

In all these discussions and analysis, we tend to forget one basic fundamentally important fact. The IT is not an industry by itself. It is a supporting sector to the real world economy. This means if there would have been no brick and mortal industry, no IT would be required, isn’t it ? We all know that for the last 2/3 years, the deadly pandemic not only damaged the human life but also made a deep dent in the world economy. The real world activity followed by the companies suffered tremendous losses during this period and it is natural that their IT budgets would get squeezed or at least differed till the situation normalizes.  Thus, though IT companies made temporary profits in the pandemic period, ultimately they have to follow the fortune of brick and mortal economy. If there are not enough IT projects in the market, the job cuts are inevitable, isn’t it ?

 

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