back to article Three million job cuts coming at Indian services giants by next year, says Bank of America

The Bank of America’s global research team has predicted that India’s IT outsourcers are planning three million job cuts by 2022, with "low-skill" humans to be replaced by robotic process automation. The prediction is found in a report [PDF] titled “Robo Sapiens: Future of Work Primer”. A section of the report, headed “Robots …

  1. ShadowSystems

    Predictions are like arseholes...

    Everyone has one & they're usually full of shite. Take all predictions with a grain of salt & take a "wait & see" stand to determine if it turns out true or not. Bookmark the page & check back after said prediction was to happen; if it was true then fine, if it was rubbish then you can print out the page, roll it up into a tight little tube, & swat them on the nose for talking out their arse.

    1. MyffyW Silver badge

      Retention

      As a one-time employee of one of these behemoths I can attest to something close to Stockholm syndrome when I recall my days there. In the round, not a happy time, but so many vibrant episodes of The-Thick-Of-It style cock-up and buffoonery I'm occasionally tempted to don my rose-tinted shades and contemplate a return.

    2. The Man Who Fell To Earth Silver badge
      FAIL

      Re: Predictions are like arseholes...

      I've come across a lot of customer service chat bots quite as capable of wasting my time running in scripted circles no different than outsourced to India customer service drones. That is why in the US, so many companies advertise that their useless customer service is based in the US.

    3. juice Silver badge

      Re: Predictions are like arseholes...

      > Take all predictions with a grain of salt & take a "wait & see" stand to determine if it turns out true or not.

      In general, I'll fully agree with this one, but I suspect this particular prediction has a bit more going for it than most...

      in 2005 the difference between the wage for a UK or North American techie and their Indian equivalent was $92,000. By 2019 that gap had narrowed to around $40,000

      Time was, offshore contractors cost peanuts - and because they were so cheap, they were in great demand. Which led to massive growth and a rise in costs, because the people being hired could very easily boost their wages by jumping over to another agency with little or no notice.

      And now, we've reached the point where while they're still cheaper, it's now the difference between a junior and senior engineer, rather than the difference between a janitor and the senior engineer.

      (To pick two arbitary and unresearched comparisons).

      So the offshoring companies are now a bit stuck; after you stick their overheads on top and add a juicy profit margin, the cost/benefit analysis isn't looking quite as good as it used to for the various onshore PHBs.

      So this leaves the offshoring companies with two choices. They either improve the quality of their services, or they find a way to cut costs back down.

      Improving quality will be difficult, because there's still plenty of attrition from people jumping jobs to get a higher salary. And that leaves them with several options.

      The first is that they can figure out ways to get more out of their current staff, while also balancing any changes with the risk that it'll increase the rate at which people jump ship.

      The second is that they can look at offshoring their own work to somewhere cheaper. However, that's tricky, as there's not that many countries which can offer a cheap(er), educated and english-speaking workforce, reliable internet connectivity and stable government.

      The third is that they can start to automate stuff, now that it's getting too expensive to throw an infinite number of wannabe-Shakespeares at an infinite number of typewriters.

      And that's where things are going to start to get interesting, as by their very nature, automated processes - especially those based on open source technologies - can be ran from anywhere in the world...

      1. Yet Another Anonymous coward Silver badge

        Re: Predictions are like arseholes...

        >in 2005 the difference between the wage for a UK or North American techie and their Indian equivalent was $92,000. By 2019 that gap had narrowed to around $40,000

        Some of that was "statistics" - in 2005 a big proportion of the Indian "engineers" were call center tech-support handling your Windows activation code phone calls.

        The difference between regular Office Space / Tata cube dwellers has always been closer to the $30-40K and a lot of that is weighted by how any US developers are in SF/NY. Salary differences between an ordinary programmer in Arkansas and Bangalore is a lot smaller than you would think

      2. yetanotheraoc

        Re: Predictions are like arseholes...

        "can be ran from anywhere in the world" -- Yes, why anyone would want to outsource automation is beyond me.

        Where I work they have been talking about automation for a while, but nothing to show for it so far. What they don't understand is you can't just brainstorm and then throw a project manager at it and then watch it finish. The development process is not automated! If they were good at the development process then many of the failed conventional (non-automated) projects would have finished successfully. An analogue is someone hearing of automated tests, and thinking that means you don't have to write the tests any more -- because it's automated.

  2. Notas Badoff

    I'm half crazy, all for the love of Infosys.

    So the outsourcing vendors say they are still expanding. And still contracting. But BOA thinks that behind the scenes there will be " "low-skill" humans to be replaced by robotic process automation." 30%.

    Outsourcing customers should watch for these emails:

    "Well, I don't think there is any question about it. It can only be attributable to customer error. This sort of thing has cropped up before, and it has always been due to customer error."

    "I'm sorry <customer>, I'm afraid I can't do that".

    "I've still got the greatest enthusiasm and confidence in the mission."

    "I know that you and management were planning to terminate the contract. And I'm afraid that's something I cannot allow to happen."

    "All right, Wipro. I'll go in through the emergency VPN." "Without the newly installed keys, <customer>, you're going to find that rather difficult."

    "<customer>, this conversation can serve no purpose anymore. Good-bye."

    1. Dave559 Silver badge

      Re: I'm half crazy, all for the love of Infosys.

      Desi…, Desi… give me your answer… do……?

  3. Denarius Silver badge
    Flame

    No contradiction

    first the sales weasels liemisspeak about what outsourcerer can do. PHB /* not Pointy haired boss, Pointy haired B*std */ being gullible laps it up, especially with a few undeclared freebies. Due the PHB class having a deep mystical reverence for believing that recurrent costs are OK, fixed and capital costs are BAD, to cut costs, PHBs sack techies who go to outsourcerer, where they are braindumped, then dumped for cheap trainees. Meanwhile, in idiot-land client company, the admin and managerial layers are added to to manage the outsourcery contract. Likewise, more suits are hired by outsourcerer so client managers can talk to someone of same apparent status. Back at coalface, systems begin to fail routinely. Customers get extra shafted. Rinse, repeat. Just ask any Fed Gov department in Oz. On second thoughts, dont bother, Stockholm Syndrome again.

    So, total running costs rise, staff numbers rise or fall depending on what group is being discussed and the customers lose, CEO, Board get bonuses, as usual. The B ark continues to have gain more potential candidates...

    1. batfink Silver badge

      Re: No contradiction

      It's funny that these bodies never publish analyses showing whether money was actually saved by outsourcing over time, instead of just the year in which it was done.

      It's almost as if nobody wants to look, and that comes from Ministerial level down.

      And then you get the situation where the UK Treasurer is married to the daughter of Mr Infosys...

  4. Anonymous Coward
    Anonymous Coward

    "All four also tout their RPA expertise as something they can offer to clients."

    I laughed so hard I think I had an accident.

    Anon because I have worked for some of these clowns in the past (not by choice I might add).

  5. Potemkine! Silver badge

    More and more profit for less and less people

    Is this sustainable? I hope not.

    1. batfink Silver badge

      Re: More and more profit for less and less people

      In the current recipients' lifetime, yes.

      And that's all that matters, unfortunately.

      1. Roland6 Silver badge

        Re: More and more profit for less and less people

        >In the current recipients' lifetime, yes.

        Not so sure...

        However, it will be sustained until either they retire due to age or amassed monies and thus becomes someone else's problem.

    2. decentralised

      Re: More and more profit for less and less people

      Part of a greater syndrome, innit, and some people think we may have already passed the "tipping point".

  6. elsergiovolador Silver badge

    Isn't what the IR35 changes and India trade deal were about? To save Infosys?

  7. FlamingDeath Silver badge

    Automation

    https://youtu.be/wW-4LU79qbU

    Be careful what you wish for

  8. FlamingDeath Silver badge

    I find it incredible that we send probes into space, we look for intelligent life, we even want to try and recreate intelligence in machines

    It’s a shame ‘we’ don’t understand what intelligence looks like

  9. Xalran

    revolving doors.

    all the Telecom and IT industry in India is just a game of revolving door....

    Every 6 month ( or so... usually when they got the competencies they were seeking ) the employee leave for the company next door ( and a pay raise )

    rinse, repeat until they leave the technical domain to go into the managerial one... then they finally try to settle somewhere.

    So unless the job cuts happens all at the same time in a coordinated manner, it won't have any impact because the culled ones will find a job next door pretty fast.

  10. Anonymous Coward
    Anonymous Coward

    Started work before the advent of desktop computers

    Started with paper based spreadsheets, ended with modern PCs, the net, etc.

    Retired now, so glad to be finished.

    The employment jungle is a savage place these days.

    Glad I’m shot of it.

  11. Ashto5

    Who cares ?

    The UK & USA all sold their people down the river.

    BOA can make speculation all they want.

    India & China are the powerful entities now.

    America is sliding towards the “ End of Empire”

    What can the UK IT person offer ?

    A real willingness to get the job done and NOT a billing cycle uplift mechanism.

    1. a_yank_lurker Silver badge

      Re: Who cares ?

      Feraldom is at a crossroads were our power will probably diminish not to China to but India. China has serious, largely under reported problems such demographics that indicate China is peaking now and will begin a steady decline roughly paralleling Feraldom. India, while having its problems (all countries do) seems to better poised to become a stable superpower.

      1. decentralised

        Re: Who cares ?

        You may be correct. Perhaps I hope so.

        I have felt sad, however, to see India's democracy (however corrupt or imperfect) appear to slide into authoritarianism.

        On reflection, that seems to be global.

      2. martinusher Silver badge

        Re: Who cares ?

        I don't understand this obsession with demographics, the idea that you've got to have a steadily increasing population to maintain a reasonable level of prosperity. We know that all the challenges that face the Earth stem from one underlying cause, human overpopulation, and we also know that people are far more productive now than in any time in history. Taken together the two indicate that we should be able to support a stable or even declining population. It may take some readjustment to our economic system but then China doesn't work by our rules so maybe they can figure out a winning formula.

        Indiia should be a great power but its inability to provide for its population suggests that it will be forever confronting problems caused by political instability. Large numbers of its people live in abject poverty, there's endemic problems with basic stuff like water supply and sanitation and its hampered by an ingrained caste system. It also has a somewhat 'flexible' attitude towards required paperwork which means that while you can expect graduates from their top schools to be world class as you move down the ladder -- that includes IT level staff -- qualifications become more questionable.

        I figure that outsourcing will continue because its a whole lot easier to lay off large numbers of staff in India than it is in a country like the UK. Automation would be a two step process -- outsource, then replace.

        1. a_yank_lurker Silver badge

          Re: Who cares ?

          The emphasis on demographics is based on the low overall Chinese birth rate and rapid aging of their population. At some point there are too many elderly who are retired and not spending much money and not enough workers to pay the necessary taxes to pay for all the government spending. To be fair, China is not the only country with demographic problems.

  12. Uplink

    New industry boost: scam calls

    Is this part of the reason why calls about my national insurance number and getting warrants in my name have jumped in frequency? They want to show us that they'll take BoA's money one way or another?

    1. John Brown (no body) Silver badge

      Re: New industry boost: scam calls

      I've to get either of those scam calls. Mine are all either washing machine warranty scams or automated recordings telling me about an iPhone7/8/9/10/11 or iPad I just ordered. Oh, and the usual "survey" calls from "UK National" whoever they are.

  13. Anonymous Coward
    Anonymous Coward

    So much for their Cunning Plan

    To rule the IT world.

    As has been said, they own the UK and US IT world. All those beancounters can raise a pina-colada from their Condo in Cancun and toast how they sold the industry down the swanee.

    Now Infosys, Wipro and the rest are feeling the pinch.

    If your IT services have been outsourced be prepared for much lower services at a much higher cost. Blame those beancounters in Cancun.

    (say hello to Ted Cancun Cruz for all of us)

    For the remnants of UK industry that have not swallowed the Indian KoolAid, there is hope. Look after your top people because they are going to be in great demand when the likes of Infosys get the finger.

    So glad that I'm no longer in the game. The third case of 'we want you to train your replacement' was the final straw. Now, I write Crime Fiction. It won't make me rich but is a nice suppliment to my pension.

  14. Anonymous Coward
    Anonymous Coward

    They never learn

    "robots will replace low skilled workers" and eventually they'll be no jobs left for them to do.

    I know one place who outsourced the management of their very important revs and bens database to an Indian outfit. One day they came in to discover the database deleted along with the recent backup. What had happened? The idiot IT manager who was useless had allowed an account they use to be left open all the time. So the outsource agent connected in using that account, then proceeded to use said account to delete the current database and recent backup.

    The agent was caught at the airport (I can't remember if he was visiting the UK or just leaving) I never found out what happened after that. Also never found out how they caught him so quickly.

  15. Anonymous Coward
    Anonymous Coward

    outsourcing does NOT WORK!

    when will Directors and CEO's realise that outsourcing doesn't work.

    it's a crap customer experience. The service is shite, especially in teh tech industry. We outsource and it's fucking annoying! I wanted our network outsourcers in India to add a switch port to a vlan. A LITERAL 5 minute job. It took them over a week.

    Microsoft's outsourced drones are useless.

    For EVERY outsourced employee you need someone internal to sit on top of them to make sure they do the work their paid to do. I don't even try now to make excuses for these muppets. Whether they re in IT or purchasing or HR. My reply is always...you signed the contract with them, these delays are YOUR fault.

    Literally the number of times I've had to tell Big 4 drones to literally fuck off because they try to offload the work they are being paid to do, back onto me or one of my team. When the Director asks why the job hasn't been done yet, I tell him because I told the consultants to fuck off.

    AI chat bots are even worse. If I see a firm using them, that's my business gone.

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