The Impact of Computerization on Employment: A Case Study of Infosys

This report examines the effects of computerization and automation on employment within Infosys, a leading Indian multinational IT company. It analyzes how technological advancements, particularly in software development and business processes, have led to significant changes, including workforce reductions. The report explores the concept of technological unemployment and its impact on Infosys, referencing relevant literature on the subject. It delves into Infosys's specific strategies, such as layoffs and the adoption of automation, and discusses the company's response to the challenges posed by the rapidly evolving technological landscape. The analysis highlights the tension between the benefits of increased efficiency and the negative consequences of job displacement. The report uses the case of Infosys to illustrate the broader implications of automation on the IT sector and the need for businesses to adapt to remain competitive in the face of technological change.

Running head: MANAGING OPERATIONS AND SUPPLY CHAIN
Managing Operations and Supply Chain
Name of the Student
Name of the University
Author note

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Executive summary
The aim of the paper is to analyze the impact of computerization on employment in Infosys. It
was seen that the automation has created many bad impact on the employees, however, it has
helped the company to grow software in a faster rate. However, this impact of computerization
on IT sectors has been long and clearly seen in the past literature.

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Table of Contents
Introduction......................................................................................................................................2
Brief description of Infosys India....................................................................................................2
Literature Search..............................................................................................................................3
Scenario Development.....................................................................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

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Introduction
Technological unemployment is the new concept that has come up in today’s
organization. It has become a blessing for some portion of the organization, while it has proved
to be a curse for another section of the society. This is because automation is slowly making its
place in the work environment. Mainly the concept of technological unemployment is considered
as a job loss due to automation of business processes. However, the change has taken place
slowly in today’s world affecting various parts of the business and causing various
effects(Infosys laid off 2018). The paper discusses about the impacts of automation on Infosys
India as the organization has recently experienced huge rate of unemployment due to
technological advancement. Further it focuses on the impacts computerization of business
processes has on business.
Brief description of Infosys India
Infosys is also known as Infosys Technologies Limited is an Indian based multinational
company. The company is mainly engaged in providing information technology services and
information technology consulting. The company is also engaged in offering business consulting
and outsourcing services. The company is known as the second largest information technology
company of Indian origin with the market capitalization of $34.33 billion. The company has 84
sales and marketing offices presently and 116 development centers. The product of the company
mainly includes services to most of the US companies. It also offers services to various domains
such as the insurance, finance, manufacturing and others (Infosys 2018). However, the service
that it provides to these companies and domains are mainly software development, independent
validation and maintenance services. One of the most known product that is provided by this

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company is Finacle which is widely used in today’s banking and financial corporations. Other
than this its main services and products include Next Generation Integrated Al Platform (NGI),
Infosys Consulting, Infosys Information Platform, EdgeVerve Systems and Panaya (Yourstory
2018). The main customers of the company are the IT sectors that uses software services and the
financial institutions.
Literature Search
It has been stated by (Nica 2016) that automation is a process that takes place in a work
and makes production and other operations easy. It helps in generating demand for the company
and modify the production that is being manufactured by labor.
Technological unemployment is the most talked topic recently due to its growing
importance in most of the industries especially the Information Technology companies which
forms a greater part of business of most of the economies (Danaher 2017). With the invention of
automation and computerization of processes things has become more challenging for these
companies. However, the most adversely impacted people from such automation are the
employees of such business. On the other hand the business has gained much from such a
technological change with faster and much better way of handling things. According to (David
2015), it has been a recently debated topic that most of the joblessness that is happening in the
society is due to the computerization and technologically controlled services. The impact of
automation and computerization of services has been a debated topic in the literature as it has
caused a decline in the employment rate in the economy. The pace at which technology is
improving and computerization is making its place in almost all kinds of services and production
is making labors redundant. This adds to the cost of the company that is maintaining high

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percentage of labor (Frey and Osborne 2017). Even though such technological progress is
causing job loss, yet there is not quantified evidence available about the future of employment
due to such change.
Classifier model AUC Log-likelihood
Exponentiated quadratic 0.894 -163.3
Rational quadratic 0.893 -163.7
Linear (logit regression 0.827 -205.0
Performance of Various Classifiers
Source: (Frey and Osborne 2017)
Frey and Osborne (2017), presented in their paper the historical impact of
computerization and the impact it has on recent day occupations and the labor market.
Technology improvement is not a recent change that is taking place. It has been highly visible
from decades when change took place. Technological innovation has helped the economy to
create wealth from decades. Since then people are suffering from joblessness and deprived of
work. The technological innovation also led to the division of two classes in the time of
parliamentary supremacy. One class of people were the property owning classes became rich and
superior as they were not affected by the technological progress and the other is the labor class
that suffered from unemployment during the industrial revolution (David 2015). Thus from
decades such innovation and its impact is taking place. In the twentieth century also such
innovation in computerization has caused incentives among the businesses and thus they are
substituting labors for computer capital.

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Management, Business and
Financial Transportation and Material
Moving Office and Administration
Support
33%
19%
47%
Employment affected by
computerisation
Title: Probability of Computerization
Source: (Frey and Osborne 2017)
It has been successfully pointed out by (Bessen 2016) that technological unemployment
is increasing the disparities and gap between the labor earnings and earnings of capital. This has
been the main result that has reduced the loss of jobs for most of the employees. This is because
automation of process in the organization is more trustworthy, less costly, faster and swifter
compared to labors. Moreover, by adjusting the worker and technological balance can help the
companies attain wage gain. This will not be possible in case they keep both labor and hire new
technology. Thus, with advancement of technology and improvement in artificial intelligence
there has been large substitute in both cognitive and emotional work. However, it has also been
successfully argued by (Arntz, Gregory and Zierahn 2016) that technological unemployment has
various negative consequences as well such as distributional issues, issues of personal time
management, unanticipated impacts on the sentiments of the labor, lowering of hand operated
occupations and others.

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Scenario Development
The thinking and findings of Frey and Osborne (2017) was visible in the operations and
working environment of Infosys with the rise of computerization. With the advancement of
technology and increasing rate of automation, it was visible that Infosys took a step to cut off
their employees on a large scale. Thus the finding from the literature about the impact of
computerization was visible in the company (Acemoglu and Restrepo 2016). Due to such affect
and advancement, company sort to lay off 11,000 workers. This led to huge increase in
unemployment in the economy. The steps was taken by the industry because the rapid increase in
digitalization was impacting the industry in many ways. This was making it difficult for the
company to maintain the cost of the service along with the labor cost. Moreover, being a
software company, it was always aiming to achieve automation at its core and develop all its
services with high end technologies. This is the strategy the company wanted to follow in order
to hold back their clients. Moreover, the cutting off of workers by the company gave the clear
signal that the IT sector has to play a crucial role in such a growing environment. Thus rising
automation has created many disruptions in the Indian IT sector (Edmonds and Bradley 2015).
Although the company was receiving a good growth rate of 7 to 8 percent, yet the pressure of
automation from other sectors had forced the company to groom the employees and take up new
technologies in their operations. However, improving the employees was not that easy and it was
much costlier. Thus, the company had to choose to cut down workers so that it can keep only
those employees that can effectively add to their productivity and are skilled. The company had
to adopt automation because software export is the main earning of the company and thus it has
to develop services with advanced technologies (Metz 2015). The company aimed to take up
automation in its software development department more because it is the most risky

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departments of the company. Thus it will change only those department that will be more
affected by the invention of automation. After automation, revenue per employee increased by
1.2 percent which forced the company to lay off employees. The cash balance of the company
also reduced to rupees 12,222 in 2017 compared to rupees 24,276 crore in 2016. Thus the
scenario that was faced by Infosys in their organization was similar to that which has been
pointed out in the literature (Acemoglu and Restrepo 2015). Thus, the company has to handle its
change in the operations by taking up new technologies and getting rid of the employees so that
in the competitive environment they stick to their place.
Conclusion
From the above analysis it can be deduced that automation has both negative and positive
impact on the organization and the employees. The employees are the one that has been badly
affected by the growing digitalization and technological advancement in the company. The
processes became much easier and less labor intensive, negatively affecting the labor. This is
because with automation the processes became much faster, less costly and much easier.
However, it became difficult for the company to take up both labor cost as well as technological
cost. Thus, they decided to cut down workers and retain only highly efficient ones. Similar
problem was faced in India’s biggest IT sector which laid to the layoff of 11,000 employees.

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References
Acemoglu, D. and Restrepo, P., 2016. The race between machine and man: Implications of
technology for growth, factor shares and employment (No. w22252). National Bureau of
Economic Research.
Arntz, M., Gregory, T. and Zierahn, U., 2016. The risk of automation for jobs in OECD
countries: A comparative analysis. OECD Social, Employment, and Migration Working Papers,
(189), p.0_1.
Bessen, J.E., 2016. How computer automation affects occupations: Technology, jobs, and skills.
Danaher, J., 2017. Will life be worth living in a world without work? Technological
Unemployment and the Meaning of Life. Science and engineering ethics, 23(1), pp.41-64.
David, H., 2015. Why are there still so many jobs? The history and future of workplace
automation. The Journal of Economic Perspectives, 29(3), pp.3-30.
Edmonds, D. and Bradley, T., 2015. Mechanical boon: will automation advance
Australia?. Research Paper, 7, p.2015.Edmonds, D. and Bradley, T., 2015. Mechanical boon:
will automation advance Australia?. Research Paper, 7, p.2015.
Frey, C.B. and Osborne, M.A., 2017. The future of employment: how susceptible are jobs to
computerisation?. Technological Forecasting and Social Change, 114, pp.254-280.
Yourstory 2018. Infosys says it has released 11,000 jobs due to automation. [online]
YourStory.com. Available at: https://yourstory.com/2017/06/infosys-job-releases-automation/
[Accessed 29 Jan. 2018].

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Infosys 2018. Infosys. Be More. Do More.. [online] Infosys.com. Available at:
https://www.infosys.com/ [Accessed 29 Jan. 2018]
Metz, B., 2015. Ex Machina: The effects of automation on employment and skills (Master's
thesis).
Nica, E., 2016. Will technological unemployment and workplace automation generate greater
capital-labor income imbalances?. Economics, Management and Financial Markets, 11(4), p.68.
The Economic Times. 2018. Infosys releases 11,000 employees due to automation: Key
takeaways from board meet. [online] Available at:
https://economictimes.indiatimes.com/markets/stocks/news/infy-lost-11000-jobs-due-to-
automation-key-takeaways-from-board-meet/articleshow/59298660.cms [Accessed 26 Jan.
2018].