Big layoffs in India's IT sector: Techies protest sacking by Cognizant, seek govt intervention
BT Online May 9, 2017
India's software companies like Wipro and Infosys are in the process of laying off employees on a massive scale, the Times of India reported. The move has come after the growth in India's 150-billion dollar IT industry has slowed down more than anticipated.
Earlier in April, country's apex trade body ASSOCHAM had warned about industry's growth prospect and said: "Aggravated by rising rupee leading to lower realizations for software exports, the Indian IT firms may be forced to displace work force. In that case, the chances of layoffs are real."
Barely a week after this warning, India's third largest software services firm Wipro fired hundreds of employees as part of its annual "performance appraisal". Wipro laid off around 600 employees, while many predicted that number to go as high as 2,000.
According to reports, Wipro CEO Abid Ali Neemuchwala, earlier in the month, mentioned in an internal conference call that if revenues don't grow, around 10 per cent of employees would be let go this year.
Last week, Cognizant Technology Solutions offered its top executives - directors, associate VPs and senior VPs - a voluntary separation package , a part of its plan to shift operations to automation and digital technology.
It was reported that at least 1,000 executives are expected to go. The company is expected to eventually cut at least 6,000 jobs, or 2.3 per cent of its total workforce.
However, a forum of IT professionals has protested the move and called it "illegal termination" of employees. According to a report in NDTV, forum of IT Employees or FITE has sought immediate intervention in its petition submitted to Assistant Labour Commissioner Chennai.
To which the IT major responed by saying, "Cognizant has not conducted any layoffs. Each year, as is the best practice across our industry, we conduct performance review to ensure we have the right employee skill sets necessary to meet client needs and achieve our business goals. This process results in changes, including some employees transitioning out of the company. Any actions as the result of this process are performance-based and generally consistent with those we've made in previous years."
After Wipro and Cognizant, now Infosys, if reports are to be believed, has also joined in laying off the employees.
The TOI on Wednesday reported that at Infosys, nearly 1,000 employees in job level 6 and above - group project managers, project managers, senior architects and higher levels - may be asked to leave.
'Managers at these levels have been asked to identify, in terms of performance, the bottom 10 per cent of their reportees, the report said.
The trouble in Indian IT industry started with US president Donald Trump's 'Buy American, Hire American' campaign. The US is in the process of tightening the norms for H-1B visas.
Nearly 86 per cent of the H-1B visas issued for workers in the IT sector go to Indians and this figure is now sure to be scaled down to about 60 per cent or even less, ASSOCHAM had earlier said.
Cautioning against a huge decline in remittances from US, the apex trade body said the US visa move could disturb remittances by 8-10 per cent.