Beyond Layoff

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...

There are two interesting headlines on layoffs in Indian IT, both from from Bloomberg. The one from today (25th May 2017) claims "Trump Blamed for Job Losses as India Tech Workers Face Cuts."    The other headline from May 11th claims "These Job Cuts Aren't Trump's Fault" The article in Bloomberg today basically quotes some former Cognizant employees to make an argument for a headline on Trump. The Article quoted Swapana Bhosale from Cognizant “Pulling people out of projects to sack them is unheard of in our industry,” said Bhosale, who demanded to be fired rather than resign so she can take legal action. The 36-year-old sees an unusual culprit behind job losses in the country’s outsourcing industry: U.S. President Donald J. Trump.  Bhosale’s not alone in blaming Trump. In cities like Bangalore, Chennai, Pune, Hyderabad and Kolkata, thousands of engineers who have been axed or face dismissal are banding together on social networks and WhatsApp group...

Amid fears of massive job cuts in the IT sector, the Forum for IT Employees ( FITE ) is trying to mount a battle against companies that are laying off employees. But in its three years of existence, FITE has already realized that unionization in the IT sector is not easy. Forum for IT Employees (FITE), a trade union representing IT sector employees, is slowly taking steps to fight on behalf of individuals who have been laid off by companies. While the union's members run into a few hundreds only, it is still early days for mass movement, according to human resource officials. FITE, which as per its website, has representation from employees in 50 companies in the IT/ITeS sectors, is looking to build its member base. FITE’s Vice President Vasumathi told Moneycontrol that once they have sufficient members, they will look at regular interactions with employers to have an employee-friendly workplace. Articles in the Indian media  IT layoffs: Amid fears of job losses,...

The Indian media has already begun speculating on the impact of layoffs in IT sector on other parts of the economy. Take for example the Real Estate sector, which was already struggling post demonitization of Indian money. Some industry watchers are closely looking at the impact of layoffs and slowdown in IT sector on the housing market, especially in major cities like Bangalore, Hyderabad, Pune, Chennai and elsewhere. Against a backdrop of such news and layoffs comes news that TCS plans to add 3.75 L sq feet office space in Bengaluru Job losses in tech sectors may reduce home sales in IT hubs (Economic Times) MUMBAI | BENGALURU: Recent news regarding job losses in the key information technology sector that has driven job creation over last two decades is threatening to unnerve residential real estate in IT hubs across the country.  The unfolding scenario may push homebuyers in major property markets in cities including Bengaluru, Hyderabad, Pune, Chennai and Gurgaon into a...

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 ...

As we know that there are few IT giants, who are asking their employees to leave organization in good terms. So, my query is, will it affect SAP SD Consultants (SAP Core Module Consultants)? My Experience in SAP SD is 2 to 3 Years. Please Explain!!! Let us start by understanding the context of ‘layoffs’ Check out My2cents on that topic “ What is the reason behind the layoffs in IT firms in India? Is it related to the H-1B visa, or some other reason?”)  Let us look at the question from a couple of angles Are SAP SD skills marketable? The skills certainly seem marketable. There are a few hundred jobs posted on LinkedIn (India), many posted by Infosys, Wipro, HCL etc. Will a company retain SAP SD consultant on long-term bench ? Let us assume you work for a services firm (“IT Giant”) that just lost a large account where dozens of SAP SD Consultants worked in a support role. After waiting for a while, they may decide to layoff *all* the folks on bench for more than 2-mon...

I happen to be a product of Indian IT. Having lived and worked in a dozen countries across across three continents, I have seen layoffs and its impact up-close. The question is very apt and timely given the news accounts of ‘thousands’ of layoffs by Indian IT Firms. (My2cents on that topic “ What is the reason behind the layoffs in IT firms in India? Is it related to the H-1B visa, or some other reason?”)  Although the Indian media is fixated on the term ‘layoff,’ some of it is voluntary headcount reduction etc. In the short-term, layoff is hard. Loosing a job is hard for obvious reasons. However, I have also seen many successful guys and ladies use the opportunity for self-reflection. If you are (relatively) young and happen to be laid off, you should begin by reflecting on your career thus far - you may realize that jumping back to yet another coding, software engineering or project management role is not really your cup of tea. Listen to your inner self Reboot and re...

This was a question that came to me from an online forum. Expanding on it, the person asked: Is it related to the H-1B visa, or some other reason? What impact will this have? My response follows Years ago, I worked for Infosys and at that time, we had an "assigned curve" based appraisal system. I think it was called ‘CRR’ (Comparative Relative Ranking) where about 5% a pool of employees would get an A+ Next 5% would get an A Another 50% would get a B (or B+) Another 20% would get a B- Remaining 20% would get a C (or Performance Improvement Plan – PIP) The company had about 30-40,000 employees. At any time, few hundred employees would be under the PIP.  Many who got a ‘C’ during a cycle, strived to work hard and improve and some folks banded into PIP for two cycles in a row were asked to ‘seek other opportunities.’ No drama. No news. Of course, the Indian IT sector was booming and many employees graded -rightly or wrongly – into the bottom rungs would ...