Telangana Minister Says Retrenchments Common In IT Industry

Hyderabad: Retrenchment of employees is a common occurrence in the infotech industry, Telangana minister K T Rama Rao said on Monday amid reports of layoffs by India's IT companies. "There is overt focus or overt emphasis on people being retrenched. I would like to emphasise (that it's) natural part of IT and ICT companies. It happens every year. It is not like it is happening for the first time," the minister for IT and industries said.

Mr Rao was talking to reporters on the sidelines of an event here. He was asked about reports of layoffs in India's IT firms, one of the largest private employers.

A few employees of Cognizant recently approached the state Labour Department alleging that the IT company was forcibly taking resignations from employees citing poor performance.

The US-based technology major has said performance reviews are done to ensure the company has the right employee skill sets necessary to meet client needs and achieve business goals.

Of late, various reports have been warning of layoffs in the IT sector.

Executive search firm Head Hunters India said on Sunday that job cuts in IT sector will be between 1.75 lakh and 2 lakh annually for next three years due to under-preparedness in adapting to newer technologies.

A McKinsey & Company report had said earlier this year that nearly half of the workforce in the IT services firms will be "irrelevant" over the next 3-4 years.

Asked about IT and IT-enabled services exports from the state in 2016-17, Mr Rao, without disclosing figures, said they are expected to be above all-India growth rate.

Last fiscal year, Telangana, a major infotech hub with Hyderabad the key centre, had recorded Rs 75,000 crore worth of IT exports.

"Our numbers (compared to) last year in terms of IT growth rates have been impressive. Unofficial figures received by us from STPI (a government body) and SEZs show we are growing better than national growth rates," he said.

On digital transactions, he said Telangana tops the chart on this front. According to the minister, the state has been recording 20 crore digital transactions a month.

"I would say the people of Telangana have been extremely tech-savvy. The data from Government of India shows we are No. 1 in the country in digital transactions. Twenty crore transactions a month is what is being currently transacted digitally in Telangana."

He said there are nearly 2,000 start-ups in the state capital in various stages.

Mr Rao indicated the state government, along with industry players, is in the process of setting up as many as 3,000 WiFi hotspots across the city.