Infosys founder chairman N R Narayana Murthy expresses dejection over recent IT layoffs

BT Online   New Delhi     Last Updated: May 26, 2017  | 17:48 IST
Infosys founder chairman N R Narayana Murthy expresses dejection over recent IT layoffs

Expressing his disappointment over the recent layoffs in IT sector , the Founder Chairman of tech giant Infosys, N R Narayana Murthy, on Friday said that the whole scenario is just sad.

Murthy, however, did not elaborate on the matter. Recently, Infosys had announced that it could hand out pink slips to hundreds of mid and senior-level employees as it carries out bi-annual performance review amid a challenging business environment.

The move comes when Information Technology sector in India is looking at tough times as seven of the biggest IT companies, both Indian and multinational firms with a significant presence in India, reportedly plan to ask at least 56,000 engineers to leave this year.

Meanwhile, a McKinsey & Company report had said nearly half of the workforce in the IT services firms would be "irrelevant" over the next 3-4 years. McKinsey India Managing Director Noshir Kaka had also said the bigger challenge ahead for the industry would be to re-train 50-60 per cent of the workforce as there would be a significant shift in technologies.

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The fear of job cuts in the Indian IT sector has spread amid a wave of protectionism washing over the world. From Donald Trump's America First emphasis to Brexit and rise of nationalists elsewhere. It has meant that Indian Information Technology companies which acted as the services back office to the world face many challenges. Irrespective of the claims to the contrary, a large part of Indian IT's advantage - though not the only one - was labour arbitrage.

In regular speak, it means that cost of hiring a software engineer in India was a fraction of doing so in the US or the UK. So doing work in India, paying employees in rupees, but billing clients in dollars or euros or pounds made it a very profitable business.

The announcement by Infosys that it will hire 10,000 people in the US (onsite) means that it recognizes the business operating environment has changed in that country. Other Indian players or MNC's who followed the India model, whether they announce publicly or not, will follow suit -- if they are not already doing that. It is not a voluntary choice.

 

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