Beyond Layoff

Earlier this summer, Forum For IT Employees ( FITE ) was getting a lot of media attention. This was during the peak of 'Indian IT Layoff' debates of 2017. Now comes news that a state government in India is recognizing the "Karnataka State IT/ITeS Employees Union (KITU)" Over the past decade, India’s information technology (IT) industry has seen multiple attempts to mobilise the workforce to form an active trade union. The efforts have finally yielded results, with Karnataka recognising the Karnataka State IT/ITeS Employees Union (KITU) as a workers’ body to protect their interests. The development comes at a time when the IT sector is facing its worst disruption in a decade. However, top executives have questioned the significance of a trade union in the sector. In 2005, UNITES, a global trade union for IT workers affiliated to IBM, opened its Bengaluru office and looked to mobilise technology employees. However, the effort did not take off because soon after

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 Americans, according to data posted

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

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

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

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

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

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