It’s been nearly six months since the Coronavirus (COVID-19) disease was first reported in Wuhan, China. The COVID-19 has now been recorded in more than 100 countries and territories. Being announced as a pandemic by WHO, the COIVD-19 has created a major impact on the global economy and the market. As the COVID-19 continues to crash various sectors in the U.S, businesses are now facing hard times and never seen before challenges.

The COVID-19 is having a major impact on the IT services sector, affecting the supply of raw materials, and causing monetary inflation on products. The initial outbreak in China interrupted the global supply chain, but as it has grown into a global pandemic, the aftereffects have become even more profound and uncertain.

This is because China supplies materials to more than 50% of the global technology companies. Due to a partial or full shutdown of manufacturing units, the technology industry is facing a slowdown of businesses. As per the IDC analysis, the global information technology (IT) services sector is expected to see a decline in overall revenue from 3 to 4 percent, as a result of the slowdown of businesses due to the Coronavirus pandemic.

How bad is the impact on the IT Services industry?

The most immediate and severe impact of COVID-19 on the IT Services sector was a major disruption to supply chains. As already stated, manufacturers in China are key suppliers to various technology companies across the globe. And as the country has been hit hard by the pandemic, it has created a major disruption in supply.

Added to this, technology companies have closed stores and offices, restricted the employees from traveling to containment zones. This has also caused a major impact on the supply chain.

The spread of the Coronavirus caused several important tech conferences to be canceled. Most importantly, the annual Mobile World Congress, which was about to take place in Barcelona on Feb 24th was called off due to the pandemic. Apart from this, Facebook canceled its Conference and Marketing Summit, Google moved its Cloud Next event completely to online, and IBM opted to live stream its conference, citing health concerns for its employees and partners. This will lead to postponement of projects and new initiatives and companies will witness a freeze in innovation in the sector.

Various Issues Faced by IT Services Sector and its solutions

IT Services Sector and its solutions


  1. Workforce

Job safety and security have become an increasing concern for employees now.

There is a slowdown in the hiring process due to the crisis that could affect a future pipeline of skilled workers.

With the increasing number of remote workers, there is more chance for cybersecurity risks.


  • Use business text messaging services to communicate clearly with the workers about their health and safety considerations.
  • Decide which jobs must remain on-site and which can be remote.
  • Redefine workforce modeling
  • Implement two-step authentication for accessing company networks, mail, and encryption on laptops and mobile devices.
  1. Supply Chain and Operation

As a result of supply chain disruption, manufacturing decreases. This leads to limited cash-flow, leading to companies expecting financial support from outside.

Moreover, due to increasing containment zones, shipping and delivery become a daunting task.

As businesses seek the help of experts to find solutions to address remote work and other problems, there is an increasing demand for top talents.

False information escalates on digital platforms


  • Prepare a contingency plan for vendor management.
  • Consider redeploying resources and find alternative suppliers to improve the production process.
  • Communicate promptly with the critical suppliers to know what level of inventories they are holding and if there is any potential delay in the delivery of important parts or components.
  • Oppose the false information immediately and communicate it with your employees, customers, and clients.
  1. Strategy

This unforeseen economic recession will make companies consider budget cuts to eliminate discretionary spending.

With increasing social distancing, remote work, and online education, there is a high demand for the products and services from the IT sector.

Startup or growing companies become more attractive for acquisitions by giant companies.


  • Redefine the cost structure of the company.
  • Look out for any merger or acquisition opportunity to improve production and innovation.
  • Support the company’s risk-management efforts.
  1. Customers

There is a decrease in purchase due to the pandemic

Companies fail to understand the changing needs of the customers.

No proper communication between companies and customers.


  • Evaluate pricing and other factors to boost current and future demands.
  • Customers must be kept in the communication loop. An SMS survey can be sent to the customers to know their current needs.
  • Use an SMS scheduler to send updates on your product availability, work timings, order tracking, and more.
  • For the Services industry, you can use text appointment reminders to ensure that you do not miss out on any customers.
  1. Reporting

The current disruptions in the supply chain and workforce will lead to financial reporting implications in current as well as future reporting periods.

There will be an increasing pressure to disclose revised guidance


  • Evaluate the reporting requirements and make accurate disclosures, if the operations are affected such that a reporting requirement is triggered.
  • Communicate the current and potential future impacts on shareholders and borrowers’.
  • Revise the key assumptions in financial projections.

Wrapping Up

With the entire technology industry taking a major hit due to the pandemic, the blow on IT services can be more massive than the preliminary estimates. The IT services sector needs to take additional steps to alleviate their risk of going through negative impacts from the COVID-19. It requires thoughtful and comprehensive planning to successfully navigate this phase.  As the Coronavirus outbreak continues to expand, it is the ideal time for the IT sector to bring in further creativity and innovation. I hope, the IT services sector will find novel ways to emerge stronger than before.

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