Covid-19 and response of IT companies (by Divjot Singh)

As the Covid-19 pandemic ravages the world, many domains like airlines, tourism and services industries are staring at huge losses due to evaporating consumer demand. But this slowdown has given Indian IT companies an excuse to freeze hirings, defer increments and even ask them to work 60 hours a week. Let’s dissect whether this is justified or not.

During the financial crisis of 2008, IT companies increased working hours from 8 to 9 hours. This lead to an additional 22 hours in a working week which increased their billings by 440 dollars per week (on basis of 20 dollars/hour billing rate in 2008).

Now let’s calculate the yearly billing rate per employee. The billing rate per employee is constant around 50000 dollars (USD) for last 10 years. But the rupee has weakened over 50% from 2010 till today (May 2020). So in rupee terms, billing rate was 25 lacs in 2010 and in 2020 it would be 37 lacs. But the starting salary of freshers is constant at 3-4 lacs (INR per year) range. 

So is it justified to ask employees to work 60 hours per week when the salary they get is constant but the revenue of the company increases? This exploitation should stop and people should question such statements from the top management. Because if we won’t these measures would become constant like the one done in 2008 to increase working hours. It would be beneficial for the economy if these companies hire more people and pay them fair wages instead of asking them to work more.

References:
% The News Minute
% Times of India
% Statista