“You're Fired!”! By the way, our Chairman is sorry about the way we fired you
I have been observing and wondering about the softer side of the software industry, especially the values and principles that drive the business. Years ago, when I worked for the software services giant Infosys, the corporate tagline was “Powered by Intellect, Driven by Values.”
That tagline perhaps symbolized the quintessential Indian middle-class values of service and sharing; values that prompted the founders to share the wealth they created by giving away stock options, grants and ESOPS to hundreds of early employees. That story was the stuff of corporate legends in the nineties through 2000s.
Infosys’ slogan is long gone, which implies things are changing fast in the software services sector. On one hand, there is a talk of how the industry has matured and globalized; and on the other hand, there is the reality of the slowdown that leaders and managers are coming to grips with.
Tough times equals layoffs
Indian software services companies are under tremendous pressure to continue to show growth in a slowing global market that is also experiencing increased protectionism in the west. Old linear growth model of hiring more ‘freshers’ and taking larger application development and maintenance contracts has reached a plateau. CEOs and boards of Services companies are hard pressed to explain newer game-plans to their shareholders. At the recent AGM of Infosys that I attended, the CEO Vishal Sikka tried to address the challenges head-on describing the convergence of factors impacting the ‘businesses’ of technology services. At the meeting, Mr. Sikka also described how the company “released 11,000 jobs due to automation.” Many small shareholders appealed to the board to consider the “human cost” of layoffs in the software sector.
Those in the industry are acutely aware of the market reality and ensuing layoffs. The global media too has been watching closely. Last week, an article in the New York Times address the human side of the issue, interviewing folks from companies like Tech Mahindra and Cognizant. (ref: "Indian Technology Workers Worry About a Job Threat: Technology") Last week, many of us also got to observe the saga unfold at Tech Mahindra; and here is the gist of the story if you missed it:
- The leadership at Tech Mahindra takes a decision to “fire” people at the earliest
- The business unit leaders told to execute this ‘strategy’ with a few junior HR representatives
- The HR representative calls an employee from a list and she is heard warning him to “Quit by 10 am, or you’ll be terminated and no benefits or relieving letter will be provided”
- The guy at the receiving end tries reasoning and questions the decision. Not surprisingly in a digital age, he records the conversation and shares it on social media
- The recording goes viral reminding me of George Clooney’s character in the 2009 hollywood movie ‘Up in the Air.’ If this were not a serious matter, there are too many satires and spoofs about the recording one could come up with.
- The viral recording forces the head of HR and the chairman of the company, Anand Mahindra to begin damage control on social media - issuing a twitter apology.
“You're Fired!” so, where’s the question of Values?
This incident is sure to bring layoffs at Indian IT back to the spotlight. However, the bigger question here is the set of values that drive these multi-billion dollar businesses.
In the process of globalizing and maturing, new generation of tech-leaders seem to have taken a crash course from Trump University. Donald Trump made the tagline “You're Fired!” famous in his starring role in reality-TV show ‘The Apprentice’. After hearing the audio clip, one wonders if Indian managers and HR representatives are secretly aspiring to ape Mr. Trump.
Most managers and leaders are drilled on ‘corporate values,’ and the topic is of perennial interest at corporate retreats. Mr. Mahindra seems to refer back to Tech Mahindra’s Core Values (published on its website) in his tweet “I want to add my personal apology. Our core value is to preserve the dignity of the individual & we'll ensure this does not happen in future.”
Herein lies a challenge. If we step away from the softer side of ‘values’ and focus on the reality of running a multi-billion-dollar business, we are likely to be confronted with a reality: letting go of employees when times are tough.
Where there’s smoke… there’s fire
It is unclear from Mr. Mahindra’s tweet if he plans to revisit the business decision on layoffs or just the way they will continue with the firings. Saying “You're Fired!” in a nicer tone is not likely “preserve the dignity of the individual.” The guy on the receiving end is still going to get the same message: he’s out of a job and has bills to pay.
During the past few months, leaders in the Indian IT industry and industry body NASSCOM were trying hard to downplay the reality of the slowdown and layoffs. However, the Tech Mahindra incident certainly brings it back to the forefront.
The fact is that creative uses of automation, DevOps techniques, AI, Big-data and analytics minimize the need for an army of analysts and tech-support staff. Talks of re-skilling and redeploying displaced techies seem to be playing in a loop: many executives place the responsibility of re-skilling back to techies without clearly indicating specific skills in demand. Similarly, demands for ‘job protection’ and ‘unionizing’ may also go nowhere in an industry known for 20-25% voluntary attrition.
Bottomline: There are certainly a lot of views, opinions and buzzwords on the way forward. Whether this is the last straw that broke the camel’s fragile back is yet to be seen.
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