From eateries to PG hostels and transportation, many businesses in and around the IT hubs have been severely hit with most employees working from home.

Manyata Tech Park
news Business Friday, August 20, 2021 - 18:55

Gajanana owns a khanavali (a place that serves north Karnataka-style meals) close to Manyata Tech Park in Bengaluru and has been struggling to keep his eatery afloat after the pandemic struck. His business took a drastic hit after most of the IT firms made work from home (WFH) the norm during the lockdown brought about by the first wave of COVID-19 in 2020. 

It's lunchtime but between 12.30 pm and 1.30 pm he has had just two customers come in, as compared to the pre-pandemic days when it used to be full during this period. “I used to get around 200-250 customers on a typical day for lunch, but now we barely see around 25 customers a day,” he says. Before the pandemic, he used to employ 15 people which included cooks, washers and waiters. However, with no proper income, he has been forced to let go of most of his staff. He currently has just two employees and his wife and mother have had to pitch in to get the work done.

“This is like a chain with the tech park at the top. We are dependent on the IT employees and other staff to eat here for us to get income. Our employees get money if we have a business and other local shops get business because of my employees. Now with all the employees working from home, we have no business and this chain has collapsed,” he says.

He adds that the only way his business can recover is if the companies start calling employees back to work.

Manyata Tech Park houses prominent IT companies including Cognizant, Concentrix, IBM India, L&T Technology Services, TCS, Microsoft. But it doesn’t have a significant local population and all the businesses there are solely dependent on the IT employees for their sustenance. There were over 1,00,000 employees working at Manyata Tech Park pre-pandemic.

Narasimha runs an Andhra food eatery near Bagmane Tech Park. According to him, he isn’t able to get even 20% of the business that he had before the pandemic. “Before the pandemic, I used to have a turnover of around Rs 15,000 a day. But now, I'm lucky if it is even Rs 2,000,” Narasimha says.

“The local businesses such as hotels and all PGs around here that were dependent on this tech park have taken a very big hit. Now our condition is such that we are not even able to pay the rent for our hotel,” he adds. Bagmane Tech Park had over 45,000 employees working there pre-COVID.  

Jeevan (name changed), who is a cook at a PG accommodation near Manyata Tech Park, tells TNM that the condition is becoming worse as many of these PG hostels don’t have occupants, with many leaving for their hometowns. “Due to WFH, many people aren’t staying in PGs as they can work from their native places. Since the pandemic began, this is the third PG I'm working in as the two previous ones shut down. This one has a capacity of 56 occupants, but now, we have just 25 people. This number is actually relatively high compared to most other PGs. Ours is located right opposite the tech park. Because of this, security guards prefer to stay here as they can come and quickly have lunch,” he says.

“The situation of PGs here is pathetic. Many of them have occupants in single digits. There was a PG built nearby with a capacity of 170 people just before the lockdown and it currently has only seven occupants,” Jeevan says.

According to him, the rent at PG hostels has also gone down drastically. Pointing to a board displaying the rent, he says, “The price was Rs 6,000 per person but now, it is being offered at Rs 4,500. Because of the reduced price, I too am not getting paid properly. Earlier, I used to get Rs 15,000 per month, which came down to Rs 13,000, and now I am getting Rs 10,000 per month. If this continues, I'm thinking of going back to my village.”

Cab, auto rickshaw drivers struggle

The other big industry that has taken a hit due to WFH is transportation. Most of the IT hub areas and tech parks are located at a distance from the traditional residential areas of Bengaluru. Apart from people living close to their work areas, several employees travelled to the IT hubs from other parts of the city. For transport, many employees depended on either cabs offered by the company, private cabs or auto rickshaws. But with WFH now, cabs and auto rickshaws have been dealt a major blow.

“Our condition was already bad even before the pandemic. Since the first lockdown, we have had absolutely no business and due to WFH, our condition is critical. Earlier, if not anything, we could at least depend on these IT employees for some minimum earning,” says N Ashok Kumar, who is a member of the Ola Uber Drivers and Owners Association.

“Many of the drivers get their cars by entering into an agreement with travel agencies, where the driver makes the down payment and the rest will be paid by the agency. Once the driver pays all the dues, then the car becomes his. But now, the situation is that many of the cars have been taken back by the travel agencies due to non-payment. Other drivers who used to drive company cabs are now on the verge of living on the streets,” Ashok adds.

Charlie, an auto rickshaw driver who stays near Manyata Tech Park, also used to rely on customers who travelled to offices in the tech park. He says that his earnings have come down due to WFH.

“Before the pandemic, I could easily earn Rs 500 a day. But due to the pandemic, people are scared to come out. Now I hardly earn Rs 300. The government announced a relief package but it couldn’t be availed by everyone due to the pre-conditions. Even if one did get the money, it was just Rs 3,000. How would this be enough to compensate for the loss of earnings. We really hope that the condition improves and employees start coming to offices,” Charlie says.

Speaking to TNM, Amit Roy, Managing Committee member of the National Restaurant Association of India says that WFH has affected all local businesses around the tech parks and IT hubs. “In Bengaluru, a lot of people have come from outside and settled here as IT professionals and support staff. Because several of these IT employees have left the city, the demand-supply has become completely skewed. There is a lot more supply than demand these days,” he says.

He also pointed out another problem caused by the WFH model. “WFH causes a problem where even if the IT employees want to order food, they would do so at the places where they stay. Suppose you are staying at HSR Layout and you want to order food, you are not going to order from Electronic City, you will order from somewhere close to home. In such a scenario, what happens to so many of the outlets inside the tech parks and IT hubs? Those outlets can’t go and deliver food to other places also.”

Trend in favor of permanent WFH

It has been reported that several reputed IT companies are contemplating switching over to a permanent WFH model as it has been working well.

Speaking to TNM, a senior software architect at a multinational IT firm says, “There definitely is a trend where IT companies are preferring the current WFH model. Initially, before the pandemic also, companies were contemplating this but were unsure. There were worries about the traceability and accountability of employees. However, now the companies have seen in the previous two quarters that this isn’t much of a problem and in fact, there is very little decline in productivity, if any. On the other hand, savings have increased in terms of operating costs.

He also says that there is no need to spend on transport and there are huge savings on water and power as well. “There are also speculations that some companies are thinking of doing away with the office space to reduce operating costs,” he adds.

The collapse of local economies?

When TNM spoke to the aforementioned businesses about this potential change to a hybrid work model, all of them agreed that it will lead to a complete collapse of local economies in the IT hubs.

“Already several businesses have been closed and if such a decision is taken, all businesses dependent on the tech parks will shut down,” says Umesh, who runs a bakery near the Bagmane Tech Park.

Ashok says, “Now at least we are living with a dream that someday our lives will be better. In darkness that’s the little bit of light we see. We are demanding from our association that the government must take steps to prevent these companies from making WFH permanent.”

However, Amit says that this new model is not sustainable in the long run and things would go back to the way they were before with some changes. “Though this might be profitable right now for the companies, (sitting at home) will definitely have an effect on the morale and psyche of the people working in these companies. Some employees are also happy sitting at home and getting extra financial benefits. But there are a lot of people who have mental dissatisfaction due to this. So I don't think you can permanently work from home. Of course, there will be some changes in the model but eventually, people will start coming back,” he adds.

Amit also feels that the government should and will intervene and prevent this new model from being implemented. “The government is also affected by this and if we see, the government revenues are also declining. If the electricity bills are down, that means that revenue is dropping. If you are earning less because you are working from home, that again is a loss of revenue for the government,” he says.

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