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IT Layoffs
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IT engineers work day and night in hope of getting promotion and incentives but this year it’s turning out to be a nightmare. The IT job market in India is seemingly crashing. Different information technology firms in India have announced that there will be layoffs and job cuts. The mass sacking is one of the worst the industry has ever seen. The number of layoffs this year is set to be twice that of last year. It is because of in ability of Information Technology companies to adapt to new technologies. Also, an inadequate growth, rise in costs (subsequent fall in profits) and the use of automation tools are also the reasons because of which IT firms are forced to handover pink slips to their employees. IT companies are unable to deal with the protectionist policies of Donald Trump. Because of Trump’s new policies IT companies have to hire US citizens now.

Many of the IT firms are asking Indian H-1B Visa holders to return to India. Infosys has recently announced plans to hire 10000 US citizens over the next two years. Over the span of past 18 months Wipro has already hired over 2800 US citizens. Apart from USA, Singapore and New Zealand have also tightened visa regulations. Companies are having tough time in adjusting to rapidly changing geo-political factors. According to industry experts the tightening of visa regulations would affect mid-level IT engineers. The IT job market in India appears to be crashing.

Different information technology firms in India have announced that there will be layoffs and job cuts.

According to industry experts, tightening of visa regulations is likely to affect mid-level IT employees with 7-15 years of experience the most because many are averse to learning new skills. Indian IT sector is witnessing its slowest growth in a decade. Many conglomerates are shifting their budgets from traditional IT services to newer areas such as digital, AI and cloud that require engineers to engage with clients instead of working remotely. Even though this shift is happening gradually, automation is the biggest culprit. It is increasingly taking over low maintenance jobs thereby forcing companies to shift workers to other projects and reduce hiring from college campuses.

Wipro which is India’s third-largest software exporter has a programme called Band Inertia. It scrutinizes employees for performance in the same band for longer periods. It identifies the gaps to re skill, and mark out those who are unable to up skill with newer technologies. It has sacked around 500 workers as a part of appraisal process and performance monitoring. Indian IT major Tech Mahindra has sacked over a thousand odd employees this month. On December 31 2016, the company’s total employee headcount stood at 117,095, while the software division had 80858 employees. Like other Information Technology majors (Wipro, Cognizant, Infosys and Capgemini) Tech Mahindra officials claim that the dismissal of employees is nothing new and its part of weeding out bottom performers of the company. Infosys is also undertaking a process for scrutinizing the performance of mid-level professionals. It is planning to lay-off as many as 1,000 employees in the coming months. The employees who are targeted are said to be those working as project managers, senior architects and in other high level-positions. The company under the leadership of Vishal Sikka is shifting its focus on automation and delivering software-led services to its clients.

The major hit has been taken by US-listed Information Technology major Cognizant Technology Solutions which has a significant workforce in India. It is reducing its employee count by as much as seven per cent which is close to 14,000 workers. Few days back, the company headed by Francisco D’Souza offered a voluntary separation option for its employees at the senior management level. Around the globe, Cognizant employs around 260,000 employees and of this around 75% of the workforce is based in India.

According to Cognizant officials, like every other IT company the layoffs will take place as part of the Cognizant’s performance review process.

Generally, the bottom two per cent of the workforce is weeded out for non-performance and it’s a common practice across Information Technology firms as part of the annual appraisal exercise. The appraisal process at Cognizant ended in March. There was a recent report by advisory firm McKinsey & Company according to which almost half of India’s 3,700,000-strong IT services workforce will be “irrelevant” over the next three-four years.

However, things do not end here. As per the industry experts, this trend may continue for next 1-2 years. It’s time that Information Technology firms revamp their models as the old traditional models have no place in current scenario.

IT industry body NASSCOM has urged that both freshers and existing employees
should focus on self-learning to stay relevant at a time when automation and digitization are causing disruption in the industry. So blaming the Indian PM or the US President or office politics or even fate is not going to work because the fault clearly lies within the employees who said NO to skill up-gradation.

With the changing dynamics in market both government and private sector must join hands and work together so that the interests of the employees can be safeguarded. Engineers have no option other than to learn new technologies and stay updated otherwise they would be relegated to “IT Labors”.