Beyond Layoff

Many organizations and tech firms are going through rounds of layoffs and only some are making headlines in the media. The reason why a large percentage of layoffs are going underreported is because managers aided by their HR partners have come up with a crafty carrot-and-stick way of asking employees to resign.  This technique is probably a variance of Voluntary Retirement Schemes (VRS) that have been refined by organizations over the years and remain highly popular because: They reduce financial burden by retiring senior, higher-paid employees, thereby lowering overall costs. Senior employees often have negotiated benefits such as better retirement contributions and health insurance, which may have been "grandfathered" and are not available to newer employees. Retirees are typically replaced with younger, lower-paid workers, further reducing salary expenses. While offering a VRS package incurs some upfront costs, companies justify it based on the expected return on investme...

 The tech sector, which has long been considered a bastion of job security and stability, is facing a wave of layoffs in 2023 as companies navigate the economic fallout from the ongoing pandemic. One of the most high-profile examples of this trend is the recent announcement by Google, a leading player in the Tech and search space, that it would be cutting 12-15,000 jobs as part of a larger restructuring effort. The company cited the ongoing economic uncertainty and decline in demand for its products as the primary drivers behind the decision. The Sundar Pichai CEO of Google and  its parent company Alphabet  explained in a blog :  I have some difficult news to share. We’ve decided to reduce our workforce by approximately 12,000 roles. We’ve already sent a separate email to employees in the US who are affected. In other countries, this process will take longer due to local laws and practices. This will mean saying goodbye to some incredibly talented people we worked ha...

I came across this question on an online forum. Here is a candid response to this question from Anon .  Going anonymous for obvious reasons. I have worked in the Indian IT industry in India from 1986. In India, as most Indians know, the concept of “hiring & firing” did not exist - at least not in those times till as late the turn of the century. You were fired only if you were found dishonest, cheating, criminal, involved in physical violence - in or out of office, etc. I started out as any fresher and rose steadily. In 2014, I faced the bomb. My employer lost a few contracts and our group faced problems. One day, my manager, who came down from US, called me and said that I (me) was not getting new business. He said that he was not firing me but “I need to pull up my socks”. I felt pretty weird. I was not dealing with the clients’ business end. As a delivery manager sitting in India, I had no access to the CEO organization that generates new business. The...

This was a question that came from an online forum. Response from our editor, Mohan, follows Thanks for asking this interesting question. At the outset, it sounds like a fishing exercise to elicit comments from digerati, since none of us seem to have any hard-data about “ most ” girls getting/not-getting laid-off . Assuming this is a serious query based on some empirical observation one can try some sampling (ref: Participation of women in workforce in India fell 10 percent in the last decade, says study ): “Though there was a spurt in the number of working women in India during 2000-2005, increasing from 34 percent to 37 percent, the female labour force participation rate has reduced continuously thereafter and reached 27 percent in 2014, the study said citing World Bank data, of the period when India's economy was experiencing unprecedented growth.” Let us assume a company employs 35% female workforce and decides to lay off 10% of the existing workforce. Let us als...

Last week, the Indian media ran headlines announcing layoffs at top companies:   "Infosys, Wipro laid off 1% of its workforce in last six months" - Times Now IT firm's headcount drops by over 3k in 3 months - Deccan Herald  One needs to read beyond the headline to understand the facts. It is customary for software service firms to announce headcount - number of people employed - any major changes during the quarter. During recent earnings announcements, the companies indicated: Wipro has reduced its head count by over 3,000 in the second quarter. The company, that had 1,66,790 people working under it at the end of June quarter, saw its workforce down by 3,031 (1.8%) to 1,63,759 at the end of the second quarter ended September 30, 2016. Infosys also indicated that in the first quarter, it had reduced its head count by 1,811 (0.9%) from 2,00,364 to 1,98,553 employees A reduction of 1.8% and 0.9% of workforce by IT majors should not be news. This seems t...

The Tata Group informed the Indian government that it plans to shut Tata Teleservices (TTSL), according to reports. TTSL is preparing an exit plan for around 5,000 employees, which includes notice period of three to six months, severance packages, and Voluntary Retirement Scheme schemes  (VRS)  for senior employees.  A small number of employees will get absorbed in other group companies, reports added. Also in Economic Times:  Lessons from Tata Tele shutdown: What to do when you are one of thousands suddenly without a job The closure of Tata Teleservices Limited (TTSL), the telecom unit of Tata Sons, will put thousands of its employees on the road. The Tata Group has informed the government that it plans to shut its wireless business, and will start the process in a month. There were 5,101 employees on its rolls as on March 31, 2017, as per the latest annual report.  Though TTSL is preparing an exit plan for most of its employees, which includes a ...

Information technology firm Cognizant said around 400 of its senior executives have accepted its voluntary separation package which will help the multi-national corporation save around $60 million dollars annually, PTI reported on Sunday. The company had offered some of its senior staff up to nine months of salary. Wikimedia Commons The international company had pitched the package, which offers up to nine months of salary, to some of its senior executives based in the United States and India in May. The firm has not specified how many of the employees were based in India, which accounts for a sizable number of its 2.56 lakh workforce. “Of the $39 million (approximately Rs 248 crore) of realignment charges, $35 million was for the roughly 400 associates who accepted our voluntary separation package,” Cognizant Chief Financial Officer Karen McLoughlin said at a recent investor call. The CFO said the step will help increase profits. The firm’s staff strength was reduced by aro...

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...

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 ...

IT workers in India seem to be on the edge with all the news of layoffs. Believe it or not, here is a recent post in an online forum that generated a lot of discussion and comments In the most ridiculous and cruel turn of fate, I had a meeting with my manager where I was reprimanded for leaving the "official" whatsapp group which my manager created. I was clicking around the interface and left the group. I did not care much about it at the time.  Come next day, I was called in and given a lecture about team work. I sucked up and listened. The next week I was called upon again asked to make leave the company or take up PIP. I understood the ploy and resigned on my own. It is the most farcical thing that happened to me in my career spanning nearly 9 years in the IT industry. Believe it or not, I am amused and a bit apprehensive about the future. I think I took the right decision any way. By the way, I just travelled onsite last month for a knowledge transfer session...

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 tremen...

Experts concede that there is no right way to conduct a layoff or hand-over pink slips to employees. However, some ways are worse than others.  A recent ET article highlights " Anand Mahindra's apology over a techie's sacking brings IT layoffs in spotlight" Anand Mahindra’s apology on social media on Friday following the firing of an employee at Tech MahindraBSE 0.96 % brought to the fore the contentious issue of the way pink slips are handed out in the Indian IT industry as it struggles with a challenging business environment and rising protectionism in the US.  “I want to add my personal apology. Our core value is to preserve the dignity of the individual and we’ll ensure this does not happen in future,” the Mahindra Group Chairman said on Twitter.   CP Gurnani, managing director at Tech Mahindra, tweeted, “I deeply regret the way the HR rep & employee discussion was done. We have taken the right steps to ensure it doesn’t repeat in the future.” ...

The New York times has an interesting article By NIDA NAJAR that highlights "Indian Technology Workers Worry About a Job Threat: Technology" The article highlights some of the key points in the article have also been discussed in the Indian media: Companies like Tech Mahindra and Cognizant have 'asked' some of their employees to resign. Some employees claim that they were escorted out by their managers and HR.  As per media reports,  these companies are "preparing to shed jobs en masse. “What we’re seeing is an acceleration in shedding for jobs in India and an adding of jobs onshore,” said Sandra Notardonato, an analyst and research vice president for Gartner, a research and advisory company. Sills and re-training seems to be a recurring theme. “Even if these companies don’t have huge net losses, there’s a person who will suffer, and that’s a person with a limited skill set in India.” However neither the article nor the employers seem to have a way forwar...

Infosys during a recent  AGM  announced it was  "releasing 11,000 jobs due to automation" In its recently held 36th annual general meeting in Bangalore, Infosys announced that more than 11,000 jobs had been released due to automation. Revenue per full-time employee (FTE) increased by 1.2 per cent as a result of automation, utilization and productivity improvements, the company said. Having said that the company blamed the media for creating unnecessary hype over the matter. Some shareholders of Infosys asked the board to consider the 'social impact' of layoffs and its social responsibility towards job creation too.  The Washington Post has a similar story on Layoffs in Indian IT.  The high-tech jobs that created India’s gilded generation are disappearing When P.R. Sujoy became a software engineer, he thought his life was made. It was a job his father, a former government employee who prized stability above all, could brag about to nosy relativ...

The first is the news of   "A Senior Infosys Employee Writes to Management" Subject: Seeking your immediate intervention and kind attention to protect innocent employees against speculated layoffs, forced resignations, termination’s and force fitting into bottom performance grades. Recently there have been a lot of disruptive news around speculated layoffs, forced resignations and terminations at Infosys. Many employees are being force fitted into bottom performance assessment grades as “Can do better/Needs Improvement” without any valid data points. This is done just to create grounds for their forced resignations/layoffs, terminations in the name of bottom performance. These are the employees who have spent years of their lives towards serving large corporates like Infosys and its big clients. They helped towards growth and revenue building of the organization. Even the founder of Infosys respected N.R. Narayana Murthy is standing by the employees and condemned all...

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...

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 ...

Forum For IT Employees ( FITE ) continues to get a lot of media attention An IT Workers’ Union: Outlandish Or A Sign Of The Times? Bloomberg wonders, adding "India’s software services industry faces a twin challenge: U.S. President Donald Trump’s protectionist policies and automation. And as companies lay off staff, a group of employees is now trying to form an IT workers’ union. There’s been a growing sense of insecurity among the IT professionals over the last few years, said Elavarasan Raja, a 27-year-old IT worker from Pune. That’s led the group to try and form a union to better protect employees’ welfare, said Raja who is part of the group. Called the Forum For IT Employees, the group now has around 3,000 members and chapters in nine cities, including its headquarters in Chennai, and in prominent IT hubs like Bengaluru and Pune, according to Raja. The group, in a recent press release, alleged that Cognizant Technology Solutions was illegally terminating thousands of emp...