Layoffs At Indian Tech Companies: What We Know In 10 Points

Nasscom says tech companies are moving away from scale Up to 6 lakh jobs could be at risk, says an HR firm Experts say the IT sector has been unable to adapt to new technology

Infosys has delayed salary hikes for a few months.
Infosys has delayed salary hikes for a few months.
  • "IT employs 4 million people and even a one per cent impact on the workforce after appraisals means 40,000 people," Mr Chandrashekhar told NDTV, arguing that IT skills are still in great demand and that people with those skills are being hired. "It's only when people aren't acquiring the latest skills that they find it tough to get employment," he said.
  • Executive search firm Head Hunters India said on Sunday that, "Contrary to media reports of 56,000 IT professionals to lose jobs this year, the actual job cuts will be between 1.75 lakh and 2 lakh per year in next three years."
  • It is not just the tightening of the work visa (H-1B) regime in US President Donald Trump's protectionist policies that is to blame, experts say. A global slowdown has seen increased pressure on margins and the big threat posed by automation has left both companies and their employees struggling. 
  • HR solutions firm People Strong said around 23 per cent of jobs that will be lost to automation globally by 2021, will be in India.
  • Experts say the IT sector has been unable to adapt to new technology. McKinsey & Company has reported that nearly half of the workforce in IT services firms will be "irrelevant" over the next three to four years. It says the industry will have to retrain 50-60 per cent of the workforce.
  • Tech Mahindra, India's fifth largest IT company, has sacked 1,000 people. Cognizant has let go of a 1000 and reports say a few thousand more jobs are on the line in the company. Some Cognizant employees have approached the Tamil Nadu and Telangana governments, calling the layoffs illegal terminations.
  • Wipro, which has let go of some 600 people, said performance assessment was the only criterion in deciding who goes. "The performance appraisal may also lead to the separation of some employees from the company and these numbers vary from year to year," the company said.
  • The country's second-largest software exporter Infosys has denied mass layoffs and too said it has only fired people based on performance. In what are being seen as more signs of turbulence, Infosys has also delayed salary hikes for a few months.
  • "Bottom performers are being let go. Restructuring happens once in a while, it's the nature of the beast," said Infosys veteran Mohandas Pai, asserting that IT companies are well prepared to deal with these challenges. "Companies agonise about these decisions, don't take them in haste. Layoffs are small and only done after a lot of deliberations," he said.
  • But not everyone is struggling. Tata Consultancy Services or TCS, India's top IT company says it is looking to create jobs and has categorically denied any pink slips. HCL Tech also bucked market expectations, with net profits up 28 per cent year on year.