Covid 2.0 hits IT firms hard

Bengaluru DOMESTIC IT firms are facing disruptions in project delivery in India as many employees are getting affected with Covid infections during the second wave of the pandemic.

Even some of the IT services and engineering services firms, which announced their quarterly earnings in late April and May, have flagged up these concerns during their analyst calls.

Sources in the know said that though operations of companies have not been impacted yet, many teams are working under tremendous pressure as some team members are reporting sick due to the infections. This is putting much pressure on other team members who have to put in extra efforts for smooth workflow, they added. "Supply concerns have cropped up from first weeks of May. In the earlier wave, it was isolated cases, which is different this time," said Pareekh Jain, an IT outsourcing advisor and founder of Pareekh Consulting.

India is facing a raging second wave of the pandemic with daily case load touching more than 4 lakh during in recent days. The current wave is much higher than the first wave in which India reported around one lakh cases at the peak. Such widespread infection has affected many employees of the IT services firms despite around 95 per cent people currently operating from home.

The companies, which announced its results in the last week of April or in the first week of May, have flagged up these concerns. "As you are aware the infection count in India has gone up significantly since April. So, the impact on the delivery side is something we have to be watchful of," said Amit Chadha, CEO and MD at L&T Technology Services.

"Our delivery risk is not from people not being able to work, but actually the health part where people fall sick, and they cannot work, or a close relative is sick, and they have to take care of them," he added. IT services major Cognizant has also said that it has to be seen how the rising case load affects delivery.

"The impact of the pandemic on industry attrition rates, absenteeism and client delivery remains somewhat uncertain. We monitor our situation daily, and we'll continue to prioritise the health and safety of our associates, while serving our clients who have been particularly supportive in recent weeks," said Brian Humphries, CEO of Cognizant at the post-earnings conference call.

Sources in the know also said that employees' return to office is also going to be delayed owing to the second wave.

"After the first wave receded, there was a hope that some employees may come back to office. However, this process is not going to happen anytime soon," said a company official.