Beyond Layoff

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...

Response to this query from an online forum follows: No . Startups are not going to start layoffs for “the same reasons” as software services companies. This is the short answer. Now let us look at the differences with your two-part question. Let us start with the first with a recap of response to an earlier question “Up to 600,000 IT engineers are likely to be laid off in the next 3 years. Why is this happening?” There are a number of business reasons why IT services firms like CTS, TCS, Infosys, Wipro and others are handing out pink-slips to poor-performers (what the Indian media calls layoffs). 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 ...