Indian IT Companies sacking their employees, Social Crisis ahead?

By Shariq Hussain

Posted on May 12, 2017

Indian IT industry has traditionally been job engine for last two decades and now it’s making news for job layoff across the board. Giant Information Technology (IT) companies which include Infosys, Wipro and Cognizant planning to lay off 56,000 employees this year.

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.

According to a source, apart from mid and senior level professionals with major experience, the $150-billion IT industry also seems that lower level employees will be losing their jobs at the end of this year. These layoffs by IT majors have escalated fears of massive unemployment and loss of livelihoods.

The layoffs come 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.

Cognizant is reportedly increasing the hiring in the US and eventually firing more than 6000 employees. A bunch from the workforce in Chennai is preparing for conciliation proceedings with the state labour department in what they claim is a fight against retrenchment.

Some of the employees who believe the company is adopting unfair methods to let go of some of its workforces have rallied behind a go-to front for IT grievances to petition the state government quoting “illegal termination”.

As we reported, Infosys was hiring 10,000 American employees; on the other hand, the IT giant is planning to axe around 1000 employees which also include group project managers, project managers, senior architects and higher levels.

Wipro was also reported that they are planning to lay off an estimated 1,500 employees across all levels as part of its annual “performance appraisal”.

 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.

Capgemini is also in the spree of firing their employees. The French IT service has reported that they are letting of nearly 9,000 people, or nearly 5% of its workforce, as they have 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.

While the companies have termed these layoffs as part of normal business decisions, many believe these are directed more towards controlling costs.

A Spokespersons for Wipro, Infosys and Capgemini termed the numbers cited in this article, in terms of employees being laid off, speculative. A Tech Mahindra spokesperson said the company “has a process of weeding out bottom performers every year and this year is no different”.

However, India;s largest IT firm Tata Consultancy Services (TSC) have no intention to fire their employees at any time this year.

All the chaos in Indian IT Industry started with US president Donald Trump’s ‘Buy American, Hire American’ campaign. Nearly 86% 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% or even less.

A Mumbai-Based brokerage analysists said: “I can’t say what is going to happen but as the news of layoffs gets louder you could expect more such things. The IT industry has clout because it employs so many people and if there are layoffs, it begins to take on a political aspect as well. But I think in an industry with so many young people, it might be hard to create a union.”

Indian IT Companies sacking their employees, Social Crisis ahead?