Goan IT companies feel the pandemic pressure


Cornavirus crisis is put a speed-breaker  on plans to make IT a potential sector of Goa’s economy with local startups continuing to feel the adverse impact of the business disruption, reports Shoma Patnaik

Coronavirus pandemic is hit the IT industry badly. With the economy in chaos in India as well as across the world the industry is facing an acute loss of business.  High flying IT companies like TCS, Wipro, Infosys, HCL Technology that were previously the stock market favorites have now lost their appeal to investors as they report lower income and profits.

Meanwhile in Goa, where the industry is made up of small startups and only a handful of large IT companies, unit owners are feeling the heat of the pandemic disruption. According to the Goa Technology Association (GTA) the representative body of IT units, there are pay cuts and job losses among local companies similar to what is happening in rest of industry. Further couple of newly set up startups have shut down. 

  Ground level check reveals that revival in the IT sector is expected to take time. Moreover the view on revival is mixed with some expecting the recovery to come about in the next two-three months while others anticipating even more uncertainty due to visa rules in the US, the biggest market for IT services in the world.

“The COVID situation left all of us in shock. Many industries were hit very badly. They all felt IT is the best industry. Initially it looked like that however like the ripple effect we too got directly or indirectly affected. Every week we are evaluating our business plans. Most of the time it has gone for a toss because things are still unpredictable, says Mangirish Salelkar, president, Goa Technology Association.

He added that, startups who provide IT services to hospitality and travel industries took the worst hit as tourism came to a virtual standstill during the pandemic. “The change in H-1B visa rules in the US has also added to the troubles of the industry as several Goans in the IT sector have returned back home,” said Salelkar. 

According to Rohin Parkar, co-founder, Mrinq Technologies, the three months of April-May-June was bad for most startups in the state. “Our company, Mrinq Technologies, had recently secured funding and had also got Rs 10 lakh grant from the state government and therefore was able to survive. But bootstrapped startups who use their own funds and run on income generated from sales found it tough,” said Parkar. 

He added that, with user industries cutting costs the fall-out was on software projects. “Startups are seeing their clients stop ongoing projects and going slow on payments,” said Parkar.

Work-from-home the new way of functioning also added to the problems faced by local IT units. Although IT firms are presumed to find it easy to work-from-home the reality was different.  “Shifting to work- from- home was complete new phenomena for IT companies and nightmare to many,” disclosed Salelkar.

He said that, some companies had to deliver not just laptops but also desktops to team members staying in villages. “Not all villages have internet. Team communication was an issue. Productivity was affected due to poor last mile connectivity,” said the GTA president.

The work-from-home problem though is getting sorted out, according to startup owners. About 80 per cent of the industry is presently switched to work-from-home mode. “The efficiency of the business came down initially because of work-from-home but subsequently improved. Our employees are getting comfortable with it although work-from-home may not suit each and everyone,” adds Parkar.

His partner, Malcolm Dsouza, co-founder Mrinq Technologies, says that, recovery of IT companies will come about slowly as the overall economy revives. “It is for sure the pandemic is not going away fast but the world economy cannot remain in a lockdown mode for ever. Recovery will come about,” says Dsouza optimistically.

Goan IT startups are a major employer of engineering pass-outs from local colleges. Thanks to the pandemic impact IT units have put a freeze on new hiring,” reveals Dsouza.