In what could be a worst-ever crisis, India’s beleaguered $150-billion IT services industry is staring at huge job losses following the global market churning and technological changes. Several thousand employees are being laid off by IT majors.
Although IT companies are claiming that it is part of the annual appraisal cycle, it is for the first time in the history of the Indian IT industry that mid-level employees are told to leave the organisation and the ratio of growth and hiring has come down to 8:4 from the earlier ratio of 10:10.
According to sources, while at Infosys, close to 3,000 employees are under the radar and expected to be laid off, Tech Mahindra is set to lay off close to 1,000 employees. Infosys, whose total headcount stood at 1,94,044 for Fiscal Year 2016, has about 1,000 employees from senior ranks who are facing the brunt of imminent layoff.
Wipro, according to reports, has laid off around 600 employees, while many predict that number to go as high as 2,000. New Democratic Labour Front (NDLF), which has IT Employees Wing and started operation in January 2015, states that Wipro has introduced a concept called band inertia as part of the appraisal system.“If a person is in the same band for seven years, he/she will be part of band inertia. In this case, performance of the employee is not considered, and HR is directly asking managers to mark More Contribution Expected (MCE) from their employees,” states the organisation.
The NDLF post states that primary target of band inertia is people in Band B3 and above (senior people whose experience is more than 10 years). “Target is to give 10% MCE ratings including people in band inertia. It is expected that over 50,000 employees are above band B3 and the target is to make 5,000 people move out,” states the post.
If the companies are to be believed, most of the employees are non-performers and their performance was found below par in the recently held performance appraisal, and they have been put under performance improvement programmes.
“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 for every performance cycle,” city-headquartered Infosys said in an official statement.
Wipro said that a systematic and comprehensive performance evaluation process triggers a series of actions such as mentoring, retraining and upskilling.
“Regular feedback and multiple opportunities are provided for improving the performance. The performance appraisal may also lead to the separation of some employees from the company and these numbers vary from year to year,” Wipro said.
Tech Mahindra stated that the company continues to implement strategies to meet the changing demands of business in the current global economic environment.
According to Gartner Worldwide IT Spending Forecast for 2017, dollar-valued IT spending growth has been revised down 1.3% to 1.4%, a small increase from 0.4% in 2016. “The constant-currency forecast has been increased 0.6% to 3.3% for 2017,” states Gartner.
Forum for IT Employees, (FITE), a body representing IT employees, filed a petition with the labour commissioner in Chennai and Hyderabad recently. “We demand the state and central government intervention to stop the illegal termination of Cognizant employees with immediate effect, reinstate all the affected employees, restore the normalcy in work environment affected by illegal terminations,” FITE said.Besides approaching the labour departments of Karnataka and Coimbatore over such terminations shortly, FITE also plans to submit a petition to Prime Minister Narendra Modi and chief ministers of all states.
Bubble-burst?
- Employers attributing the situation to bad performance of employees
- Wipro, according to the reports, has laid off around 600 employees
- At Infosys close to 3,000 employees are under the radar, while at Tech Mahindra close to 1,000 employees are on radar
- 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% of employees would be let go this year.
- Infosys employee strength stands 1,94,044, followed by Wipro (more than 1,70,000) and Tech Mahindra (1,17,095)