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It is being feared that COVID-19 setback to service sector businesses ...

  Jun 24, 2020

It is being feared that COVID-19 setback to service sector businesses specially IT could be serious. Do you agree? Examine

  1. The economic slowdown is expected to cast a gloom on the financials of the Indian IT services.
  2. A large demand of Indian IT services come from across the globe like from USA, UK and others and now due to the global lockdown and halting of businesses, the sector is facing severe contraction of demand.
  3. Instability and uneven growth in the global economy has had an adverse impact on the growth of the IT industry in the past and may continue to impact it in the future. 
  4. As per the experts, If the economies of the U.S., U.K. or the EU weaken or growth remains uneven — including as a result of the uncertainty surrounding Brexit — clients may reduce or postpone their technology spending significantly. This may cause problems. 
  5. This may, in turn, lower the demand for its services, negatively impacting its revenues and profitability.
  6. The rebound too is not being seen so easily in the near future. It would take it’s own time and by then the industry would have to manage it’s costs like paying salaries, fixed costs etc.
  7. However, due to an upsurge in demand of online services, there lies a silver lining for the industry but the compensation would not be equal to the losses already occurred or is expected to occur.