A day after Cognizant Technologies stirred up quite a storm with reports of the top IT performer considering to let go of as many as 6,000 Indian employees, the worrying trend appears to be catching up. Top Information Technology companies in India are looking at large scale layoffs this year amid a slowdown and a shift towards hiring more Americans.
Large IT companies such as Wipro, Infosys and Capgemini are believed to be considering layoffs on a scale larger than what was witnessed during the economic slowdown between 2008 and 2010. Middle to senior level employees are likely to take the first hit while the junior workforce could also see a shakeup towards the latter half of the year.
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At Infosys, for example, nearly 1,000 employees in job level 6 and above (group project managers, project managers, senior architects and higher levels) are expected to be asked to leave. Times of India reported today that managers at these levels have been asked to identify, in terms of performance, the bottom 10 per cent of their reportees.
In a statement issued later, Infosys said its performance management process provides for a bi-annual assessment of performance. "A continued low feedback on performance could lead to certain performance actions, including separation of an individual and this is done only after feedback. We do this every year and the numbers could vary every performance cycle," the company said.
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If the development at Infosys sounds a warning bell, there's more.
Wipro CEO Abid Ali Neemuchwala in an internal conference call in March this year said that the 1.81 lakh employees-strong company could let go of around 10 per cent of its workforce this year if revenues don't grow. “Today, the performance measurement is not on what you were doing till yesterday, but whether you are ready for tomorrow," Neemuchwala was quoted as saying later.
According to the TOI report, French IT services major Capgemini was also considering large scale layoffs, with former employees of iGate – which Capgemini acquired in 2015 – forming a major chunk of the likely retrenchments.
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While the report pegged the number at 9,000, Capgemini told inditavnews.com that it has not announced any layoff plan and expects to recruit more than 20,000 new team members in India this year.
"Each year, our employees are evaluated based on strict performance criteria in an objective process, consistent with industry norms, to ensure we are aligned with our customer needs, business priorities, and the overall industry evolution. This leads naturally to a varying number of employees transitioning out of the organization in any given year.
"We are highly committed to continuous talent development and building the capabilities of our employees to help them stay relevant. We continue to accelerate our training programs in 2017 with over 2,000 India employees having already undertaken up skilling and emerging technologies training alone.
As of March 31, Capgemini's total headcount was 195,800, with 57 per cent employees in offshore centres, mostly in India.
The news about the purported layoffs by IT biggies in India comes at a time when techies at Cognizant approached labour unions and began exploring legal options over the company’s move to layoff 6,000 employees in India. It has been reported that ten Cognizant employees have filed a petition with the assistant commissioner of labour arguing that they were being forced to sign voluntary resignation letters.
Last week, Cognizant announced a voluntary separation programme for top executives in India, including directors, associate VPs and senior VPs. Some 1,000 executives are expected to go while the company is expected to eventually cut at least 6,000 jobs of its total workforce.
