COVID-19: Impact of Coronavirus Pandemic on IT Industry

Impact of COVID-19 on IT Sector

When America sneezes, India catches a cold. When Europe too sneezes, India gets a fever, quipped an official of a large software company. The main trait in the present scenario is Covid-19 that will significantly impact the Indian IT sector which worth is $180-billion; assuming that the impact will be worse than the global financial crisis in 2008.

To justify this fear, let’s consider the US and Europe which are accountable for more than 2/3 of IT exports in India; both the geographies are worst affected by this pandemic. Clients could automatically reduce their IT spending this year. According to last month’s data, IT and IT enabled services companies in India may have to trim their workforce or hire flexible staff as a part of the cost-cutting strategy with projects get delayed due to Coronavirus.

Contrary to the belief that Flexi or remote staff could be the first choice during this time, experts believe that also may get an advantage as they have the variable cost structure and minimal compliance requirements.

As a result of the continuous slowdown in the IT sector, companies will surely focus on controlling costs and trimming the staff will be measured they can use. In such stages, business owners will consider factors like – skills, outcomes, competency, impact, costs and compliance when it comes to deciding which type of employee should be trimmed.

India is a place where start-ups are growing at a fast pace, so the retention of employees is based upon skill requirements, client needs and financial health of the company. As companies also try to have the least impact on their financial condition, compliance costs so that they intend to focus on outcome-driven engagements.

IT industry is a part of the global supply chain; any disruption in the latter may have an adverse impact in India. Basically, Covid-19 is a challenge for all nations as IT spends is expected to decline in 2020.

There are several factors that Covid-19 has made the industry disabled with this attack-

  1. Dealing with less productivity and performance – The virus is likely to affect the outcomes on individual and group levels. Employers may try to adjust sales and bonus targets into account unpredictable circumstances and consult their sales plans to identify the parameters. Managing daily productivity and performance issues have become complex due to the current scenario. In India, workers from small enterprises are hit worst in India. Many of them are not able to utilize the work from home facilities, due to which companies are waving those employees to cut down costs; it puts a vast impact on the production and performance of IT companies.


  1. Fallout disrupts global supply chains – Presently, IT companies are managing disruptions of their supply chains as it will help in strengthening the business structure. As the whole world is going through from this pandemic, due to which it wouldn’t be easy to buy and sell products at premium prices and hold capacity. The recovery of the supply chain will take a long time, which will affect not only affect India’s supply but also the global supply.


  1. Cash flow crisis for SMEs – Over 30% SMEs are going through pressure on their cash flows. This lockdown have forced businesses paying for supplies earlier than anticipated because of Covid-19 related stockpiling and dread of disruptions to transport link.

At last, organizations and enterprises are trying to find their zone in the chaotic circumstances created by the coronavirus like being enforced to implement the remote working atmosphere while remembering productivity, a big challenge for the companies that usually don’t let people work remotely.

Obviously, Coronavirus pandemic is serious. But thoughtful and precautions must be taken to keep yourself and your teams safe and healthy. However, conducting meetings on the chat or video call is the first step to spreading Covid-19.

Read More: How to Increase Immunity Power in Body Naturally

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