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Jobs in India’s IT sector will get reduced by around 3 million by the year 2022 as IT companies are adopting automation at an increasing pace, according to a report published by the Bank of America. The switch from employees to robot process automation(RPA) will help domestic IT companies save over $100 billion in salaries.
According to the estimates of Nasscom, India’s IT sector supports employment for over 16 million people including employees in low-skilled services and BPO. It is a strategic sector for the Indian economy, contributing over 9% to the country’s GDP.
The report, released by Bank of America on Wednesday, reveals that those employed in low skilled and BPO roles would be the worst affected as around 3 million or about 30% of current jobs will be lost to automation.
RPA uses software instead of employees to perform everyday, high volume tasks thus allowing the staff to focus better on other complicated tasks. The advantage for IT firms is that RPA’s can work for 24 hours a day, increasing productivity and generating “saving of up to 10:1 versus the human labour,” the report informed. The Bank of America estimates that switch to RPA will save $100 million worth of salaries and other costs. “It offers a likely USD 10 billion boon for IT companies that successfully implement RPA, and another a USD 5 billion opportunity from a vibrant new software niche by 2022,” the bank added.
Another factor behind job losses is that developed countries are increasingly looking at bringing back off-shore IT jobs for their domestic workers as a part of building resilient supply chains. The report adds that emerging countries like India and China face the most threat from skill disruptions while Japan, Persian Gulf and ASEAN countries face the least risk.