Indian IT companies not going for mass job cuts: Nasscom

Over the last few weeks, reports of layoffs across the sector have been making headlines.

Over the last few weeks, reports of layoffs across the sector have been making headlines.

NEW DELHI: Industry body Nasscom today sought to allay fears of mass layoffs in the Indian IT sector and claimed the industry continues to be a “net hirer” with over 1.5 lakh people being employed on net basis every year.

Stating that the reports of mass layoffs were incorrect, it said workforce realignment, linked to performance appraisal processes, is a regular feature every year.

10 IT and telecom companies cutting jobs

10 IT and telecom companies cutting jobs
Cognizant
Capgemini
Infosys
Wipro
Tata Teleservices
Aircel
​Snapdeal
​LeEco
​Craftsvilla and YepMe

10 IT and telecom companies cutting jobs

These seem tough times for IT and telecom employees in the country. Several large IT and telecom companies are in the process of laying off employees on a scale not seen since the 2008-10 downturn.

Those taking the hit first are mid-and senior-level professionals, however, many lower-level employees too are likely to face the axe in the coming months.

Here are 10 IT and telecom companies that have announced job cuts (or are likely to) this year.

Cognizant

Cognizant appears set to cut at least 6,000 jobs, which represents 2.3% of its total workforce, as the IT MNC struggles with growth in an IT environment that is fast shifting towards new digital services. The company is said to be looking to cut roles that have become redundant due to the impact of automation on lower-end IT jobs.

Last week, the company announced a voluntary separation programme for directors, associate VPs and senior VPs. Some 1,000 executives are expected to be impacted by this.

Some Cognizant employees, through the Forum for IT Employees, have also filed a petition with the assistant commissioner of labour arguing that they were being forced to sign voluntary resignation letters.

Capgemini

French IT services major Capgemini is said to be letting go off nearly 9,000 people, or nearly 5% of its workforce. A large part of this are erstwhile employees of Igate, the company that Capgemini acquired in 2015. Capgemini had reportedly asked over 35 VP, SVPs, directors and senior directors to leave in February and 200 people were asked to leave at one of its offices in Mumbai.

When TOI asked Capgemini about layoffs, the company did not deny that some had been asked to leave, but added that it expects to recruit over 20,000 new team members in India this year. “Each year our employees are evaluated based on strict performance criteria in an objective process, consistent with industry norms, to ensure we are aligned with our customer needs, business priorities, and the overall industry evolution.

This leads naturally to a varying number of employees transitioning out of the organisation in any given year. We continue to accelerate our training programmes in 2017 with over 2,000 India employees having already undertaken upskilling and emerging technologies training alone,” it said.

Infosys

Indian IT giant Infosys too is likely to announce job cuts in the coming days. According to sources, nearly 1,000 employees in job level 6 and above (group project managers, project managers, senior architects and higher levels) are expected to be asked to leave.

Managers at these levels have been asked to identify, in terms of performance, the bottom 10% of their reportees. Late last month, Infosys is also reported to have asked some 500 employees to leave, citing ‘non-performance’ as issue.

On its part, Infosys said that its performance management process provides for a bi-annual assessment of performance.

“A continued low feedback on performance could lead to certain performance actions, including separation of an individual and this is done only after feedback. We do this every year and the numbers could vary every performance cycle.”

Wipro

India’s third-largest software exporter Wipro too is said to have initiated moves to trim excess layers of managers and executives inside the company and make the organization leaner and more decentralised as part of CEO Abidali Neemuchwala’s broader strategy.

As part of this de-layering exercise, Wipro is removing additional layers such as that of a “project leader”, which are increasingly being rendered redundant as automation kicks in big-time and newer, more specialised roles emerge in India’s $160-billion IT industry.

Tata Teleservices

Tata Teleservices recently fired between 500 and 600 employees. As many as 500-600 employees are said to have been impacted by the lay offs in sales and other related functions, according to people familiar with the matter. The lay-offs have been done across locations. The severance package being offered to the employees impacted by the decision is one-month’s salary for every year of service.

Tata Teleservices spearheads Tata Group’s presence in the Indian telecom market. The company, along with the listed arm Tata Teleservices (Maharashtra) Ltd has presence in 19 telecom circles in the the country.

Aircel

In February this year, cellular services major Aircel reportedly gave pink slips to 700 of its employees — around 10% of its pan-India staff strength – in its first stage of manpower downsizing amid a huge wave of consolidation that is going to engulf India’s telecommunication sector. Aircel has around 8,000 employees in India.

​Snapdeal

In February end, Indian e-tailer Snapdeal confirmed that it is cutting jobs, but declined to specify the exact number of employees affected by the decision. The company is said to be cutting 30% of its workforce.

The move is expected to affect about 1,000 employees directly employed by the company in its e-commerce marketplace while thousands of contract workers in its company’s logistics division too may be let off.

​LeEco

Four months after Chinese billionaire Jia Yueting acknowledged his company LeEco was fast running out of cash, the erstwhile high-flying company fired 85% of its India staff and allowed two leadership exits in what the industry says is a precursor to its eventual withdrawal from the South Asian nation.

Industry executives attributed the likely exit to the financial crisis at the parent firm and its decision to focus on China and the US.

​Craftsvilla and YepMe

Ethnic online retailer Craftsvilla and fashion portal YepMe are among the startups that have given pink slips in the recent weeks. Craftsvilla is reported to have laid off more than 100 staffers in recent weeks, including its entire product and technology teams and most of its operations and marketing teams.

“Skilling and workforce realignment are essential to remain competitive in international markets. It needs to be appreciated that such workforce realignment is a normal part of the internal process of companies based on their own operational imperatives,” Nasscom said in a statement.

It pointed out that no significant changes have been reported or observed this year.
“Such reports are incorrect. In fact the industry continues to be a net hirer with over 1.5 lakh people being employed on a net basis each year, though the focus is shifting from scale to skill,” it said.

Over the last few weeks, reports of layoffs across the sector have been making headlines.

IT majors like Wipro, Infosys, Cognizant, and more recently, Tech Mahindra have initiated annual performance reviews, a process that also weeds out bottom performers or non performers. Estimates suggest that thousands of employees in the sector could be shown the door over the next few weeks.

The development comes at a time when Indian IT firms are facing challenges in the business environment and stricter work permit regime in countries like the US, Singapore, Australia and New Zealand.
While the companies have termed these layoffs as part of normal business decisions, many believe these are directed more towards controlling costs.

With the US hardening its stance on outsourcing, IT firms are under pressure to hire locals instead of taking Indian employees on work visas to client sites. This also impacts their margins.

IT companies have been one of the largest recruiters in the country. Apart from the impact of stringent visa regime, increasing automation of processes would also lead to reduction in hiring in coming years.
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s