Takeaway: CoronaVirus pandemic has locked us all inside our homes, forcing us to work remotely amidst the health emergency. Here’s our report on how COVID-19 has impacted the IT industry and tech-startups in India.
Over the years, the Information Technology industry has emerged as one of the leading job-providing sectors in the world. According to a November 2019 issued publication by CompTIA, the global IT industry remained on a pace to reach $ 5.2 trillion marks in 2020 until the Coronavirus pandemic surfaced to become the biggest health emergency of the generation.
Reuters stated that the US, holding a significant share of 32% in the global IT market, would witness a 30% contraction in the second quarter, along with a 5% overall drop in the US growth in 2020.
The Coronavirus disease, also known as COVID-19, is an infectious disease that originated in the Wuhan district of China in December 2019. The virus is spread through water droplet exposure from an infected person, causing symptoms like fatigue, fever, and difficulty breathing.
The governments from different states have endured a mandatory lockdown on its citizens to prevent the spreading of the disease. Over a third of the global population is on a Coronavirus lockdown, reports Business Insider. As a result of the simultaneous demand and supply shocks, the businesses from all verticals, including Oil & Gas, Real Estate, IT, etc. have suffered.
What is the current IT industry trend amidst COVID-19?
According to Statista, the outbreak has led to revised growth forecasts for global IT spending. The present estimates show the global IT sector declining by 2.7% in 2020, compared to the last year. This is a further decline when compared to the already adjusted forecasts from March 2020.
The March 2020 forecast provided two possible scenarios of the COVID-19 impact on IT:
The ‘probable’ scenario where IT spending is projected to grow by 3.7% in comparison to 2019.
The ‘pessimist’ scenario showcases a 1.3% growth in 2020.
The newest release exceeds the pessimist scenario, displaying a contraction in the IT market, instead of small growth.
Impact on Indian Tech Startups
The COVID-19 outbreak has drastically impacted industries that involve larger manual labor like that in manufacturing and retail. E-commerce websites like Amazon, eBay India, and Flipkart has shut down its operations across the nation and are now only delivering essentials in limited areas.
According to reports and data collected by Layoffs.fyi, over 19,660 employees have been laid off since 11th March by over 220 startups across the world. In India alone, over 60 plus startups have laid-off their employees because of losses being incurred during this period.
Note: Startup India has started a COVID-19 Innovation Challenge to help fight the infectious disease through solutions for precautionary & treatment-related interventions.
Increase in Remote Working
Employers and employees have been forced to work from home during the times of this lockdown, which has in-turn displayed the potential held in remote working. While specific industries cannot rely on work from home for the usual functioning of their firm, other tech-related and media companies that have a significant chunk of work being done online have hardly been affected by the lockdown work-wise.
Presently, job search sites have seen a rise in the desire to attain a work from home internship or job during these times. It is predicted that even after the lockdown is over, work from home jobs will be majorly demanded by individuals of the nation.
Multiple measures would act as the building blocks for molding the future of the IT industry post-pandemic. As a preventive measure, executives and the technical leaders must learn the dimensions of managing a crisis to help respond efficiently, recover, and thrive despite the atrocities. Moreover, technologies to improve smoothness and productivity during remote working must be worked on.