Beyond Layoff

An interesting article in Deccan Herald (cross posted from New York Times) today highlights how it employs 1,30,000 people in India - about one-third of its total workforce, and more than it does in US. Key highlights from the article: IBM opened its first Indian offices in Mumbai and Delhi in 1951 is now spread across the country, including Bengaluru, Pune, Kolkata, Hyderabad and Chennai. The company employs 130,000 people in India — about one-third of its total workforce, and more than in any other country.   IBM is unusual because it employs more people in a single foreign country than it does at home.  The company’s employment in India has nearly doubled since 2007, even as its workforce in the US has shrunk through waves of layoffs and buyouts.  IBM employs well under 1,00,000 people at its US offices, down from 1,30,000 in 2007.  Depending on the job, the salaries paid to Indian workers are one-half to one-fifth of those paid to America...

Answer to a recent question from an online forum Here is an image that perhaps summarizes the Indian IT Industry All of us have a viewpoint on what’s ailing the IT industry ( link ) Large software service companies employ nearly 200,000 people each. The rate of voluntary attrition is at historically low percentages. Assuming some sort of a bell-curve grading continues, and companies expect 5-10% of the bottom-rung people to ‘voluntarily’ leave, we are still looking at 10-20,000 people (each) leaving. The global software services market has slowed down. Most of the large software-service firms are projecting slower yearly growth. Thanks to Trump’s Executive actions, Indian firms are promising to hire tens of thousands of American workers. One could include other factors like increased automation and productivity gains that are being touted by IT leaders. Factor in the slowdown in American work-visa (H1) issuance, protectionism in Australia, England and elsewhere that less...

There is a is a recent article from NDTV   titled "Reskill Yourself, Hiring Specialist's Message To Mid-Level Indian Techies" The advice seems logical, and timely. As a matter of fact, most 'management gurus' and IT leaders are are parroting  the Reskill Reskill Reskill  mantra However, What to reskill on and How to go about it is unclear, perhaps even to the 'Gurus' Read rest of the article: Mid-level positions in India's IT sector are most at risk as the industry grapples with changes in the technological landscape and stringent visa regimes in many overseas markets, according to a top executive of staffing firm TeamLease. There have also been reports of layoffs by many IT companies, even though the industry has denied the allegations. "The nearly 1.4 million mid-rung employees, who typically have 8-12 years of experience, are now at the centre of reskill and restructuring conversations happening across the sector," says Alka Dh...

Three of India's top IT companies saw significant reduction of their workforce in the quarter ending June, according to a report in HT Mint . "The $154 billion Indian information technology (IT) sector, once India’s largest creator of jobs, is now struggling to even add to its workforce. For the first time, three of the five largest IT companies saw their workforce shrink in the quarter ended June 30. The five firms, which together employed 878,913 people at the end of the June quarter, saw their workforce shrink by 1,818 people." According to Economic Times , E-commerce major Snapdeal on Monday revealed that it is facilitating a major layoff in the company, with an agenda to cut down 80 percent of its employee strength. A senior official of the company told ANI that the management has given verbal instructions to their department heads to prepare the list.  Additionally, the official also revealed that the owners of the firm have reversed the merger which was t...

A couple of days ago, we looked at NASSCOM''s forecast of "Indian IT sector to see up to 38% fewer jobs this fiscal" This week, ZDNet posted an analysis "It's time for TCS, Wipro, and Infosys to say goodbye to double-digit growth forever" The results from the most recent quarter that ended in June 2017 are just in and there are no surprises here amongst the big three in Indian IT. Using this impetus to wean themselves off of low-end work and gravitate towards more value-added assignments could save Indian IT. TCS, India's largest IT services company, posted a 5.2-percent growth in revenues (in dollar terms versus a year ago) as well as a 7-percent drop in net profit. Mint newspaper, observing that it was the company's "11th consecutive quarter when the company has either under-performed or at best managed to match analysts estimates" called it a result of "unimaginative leadership" in a separate piece, which is an un...

Many of us watching the IT services sector already knew this but here is an update from Times of India IT industry is reorganizing its workforce to deal with automation and achieve cost savings. TCS and Infosys saw employee headcount reduce by 1,414 and 1,800 in April-June quarter respectively. There will be lower net addition of techies due to sectoral headwinds and macro economic factors. In what comes as a harbinger of turbulent times setting in for the IT sector, NASSCOM has said the industry would create 20-38% fewer jobs in FY18 compared to fiscal 2017. The industry would create 1.3-1.5 lakh new jobs (lateral plus campus) in FY18 while it had added 1.8 lakh jobs in FY17. At its peak, the sector added nearly 2.40 lakh jobs a year. There will be lower net addition of techies due to sectoral headwinds and macro economic factors. "Tech is eliminating jobs in every sector, including IT. It is also creating jobs. Countries like the US and UK have been adopters of ...

You are probably referring to “ layoff of IT professionals in India” that is generating a lot of news. Let us start by looking at the basics. Indian software service companies generally do NOT resort to “layoffs” or shutdown entire business units and retrench people enmasse. By doing so, they will become subject to labor laws and other government regulations. What they do instead is the following: Wait for natural attrition and slow-down hiring - The attrition in Indian IT has been in the 10–15 percent range Instruct individual managers to seek the help of HR to initiate “Performance Improvement plan” for the bottom percentile of people. For a large company like Cognizant, TCS or Wipro, the ‘bottom 5–10 percent” of people will account for 10–20,000 people. Such a large number of people being “nudged out” becomes news; which the Indian media calls it ‘layoff’ A while ago, I blogged about Cloud Computing Architects (link) . Architects working for consulting firms have to sta...

This was an interesting question from an online forum. Another similar question that came up. Is it true that Cognizant is planning a mass layoff in the upcoming months? Rumours has it there are plans to layoff as many as 20,000 people from the company. As a result there has been a delay in the appraisal cycle as well. Seniors or any people well informed kindly shed some light into it. To respond, let us start by looking at the basics: The business model in the western /developed countries are much more ‘business friendly’ and many states in the US have "right to hire" or “employment at will” laws. What this means is simple: Employers can terminate employees “without cause,” just like employees can leave a job without giving a lengthy notice period. However, employees who are part of such involuntary termination can file for ‘unemployment benefits’ till they find another job. Software service companies in India operate in the same global environments...

Hiring and firing are a common business practice in the west. The typical American spends about 4.2 years in a job ( link ) and sometimes leaves for better opportunity and at other times may be fired or laid off. The phenomena was glorified by reality TV shows like The Apprentice with Donald Trump’s punchline “You’re Fired”   ! Googled image Even considering the fact that layoffs are a common business practice in the west, the impact of a job loss is hard on individuals. Many psychologists and researchers classify “Job Loss” among the top 5 stressors for people, ranked with the “Death of a loved one,” Divorce, and Major Illness! Let us switch to layoffs in India, more specifically layoffs in Indian IT which is in the news a lot. The news of layoffs come at a time of additional scrutiny on employment-visas in the US, UK, Australia and elsewhere, and a general slowdown in the Indian IT (my earlier response to a question). For those laid off involuntarily,...

Every year, about 400,000 graduates with Engineering and Technology degrees from varying branches/disciplines graduate from universities in India. In addition, hundreds of thousands graduate with other degrees, including computer applications, commerce, science and arts.  In the past years, companies like Infosys, Wipro, TCS and others would go to campuses and hire tens of thousands of Tech graduates and send them through boot-camp like training that focused on programming and software engineering. Googled image Years ago, when I first started my career in IT, my manager – a seasoned veteran – gave me a simple piece of advice that holds true to date. When I went to him for advice for career planning he ended with the old Chinese quote “Give a man a fish and you feed him for the day. Teach him to fish and you feed him for life” Source (beliefnet) In 2017, this hiring has slowed considerably and 2018 may be no different.  If you are a fresh graduate, y...

People are wondering about the state of Indian IT. A number of media articles are claiming "Up to 600,000 IT engineers are likely to be laid off in the next 3 years. (link)" Why is this happening? First things first, this is not the time to panic over headlines, especially when there are a lot of rumors that are circulating. Journalists – even those with little understanding of the business of IT - are having a field day churning out articles with sensational headlines. Many articles are focused on Trump administration’s policies and restrictions on visa and immigration. Some are parroting claims by leaders of software services companies that productivity gains and automation of tools and processes needs a lesser number of people. Some analysts are also claiming the need to reskill on emerging technologies including big-data, AI, bots-and-robots etc Some of this may be true, but doesn’t explain the churn of tens of thousands of jobs. There are a couple of black-swan ...