The new service line -- Digital Business and Technology -- will be headed by current president and head of digital business, Malcolm Frank.
Accenture is offering a seven-month severance payout to employees impacted by its latest layoffs. The package is high considering most companies offer a two-three months’ payout, or one month of salary for every year of service put in.
This is a fallout of Cognizant’s announcement in October that about 6,000 of its employees in the content moderation business for Facebook may be asked to go. The company had then said it would exit this business, and would try to find new homes for the employees involved.
Recruitment firms have received at least a few tens of thousands of queries for entry to senior levels in IT services space. Xpheno, a specialist staffing firm, has seen almost 40% spike in CVs from senior tech professionals from IT services companies over the last fortnight.
Cognizant will let go of as many as 7000 jobs in the next few quarters and exit its content moderation business, impacting another 6000 employees, as it begins a strategic restructuring to cut jobs.
Many of those laid off were mid- or upper-level techies, with low lateral skills for other industries.
The Teaneck, New Jersey-based IT services provider earns around 38% of its $16.8 bn revenue from digital businesses.
Most of these employees are based out of India. The list has been submitted to chief executive officer Brian Humphries’ office, the people said. They are part of the 10,000-12,000 mid-to-senior level positions globally that the company said in October it would remove from their current roles in the coming quarters, the people said.
Vinod AJ, general secretary of the All India Forum for IT Employees (AIFITE), said Cognizant employees across Chennai, Bengaluru, Hyderabad, Pune, Kochi and Kolkata have been affected.
The compensation increases have come at a time when the company said it was laying off as many as 200 senior executives.
The Teaneck, New Jersey-headquartered firm has been cutting jobs for the last two years.
Cognizant said its headcount growth had outstripped revenue growth in the past two quarters.
The axe will fall mainly on midlevel employees and those who haven’t picked up relevant skills.
"All these IT multinational companies have been earning huge profits and there is no reason to retrench employees. The firing operations are being taken up on the pretexts of ‘growth plans', ‘restructuring', ‘role rationalisation' etc, which are nothing but measures to maximise their profits at the cost of employees," CITU said in a statement.
Cognizant has cut the bench time for employees, opening up the possibility of more exits.
Last year, Cognizant had offered nearly 400 employees a voluntary retirement scheme but this year's move by the company to cut senior level jobs is involuntary.
Speculation about thousands of job cuts last month has heightened anxiety among employees.
Accenture, Infy, TechM, Cognizant, MphasiS investing to make workforce future-ready.
The voluntary separation programme could be for 300-400 executives holding the title of a director.
Cognizant spokesperson said: “Cognizant has not conducted any layoffs. Each year, as is the best practice across our industry, we conduct performance reviews.
Under new CEO, Cognizant is undergoing a widespread restructuring aimed at boosting growth & lowering costs.
Rumours abound about a spike in the employee see-off numbers this year contrary to the annual one to two per cent, sources said on Saturday.
Two things happened around 2016 that might provide a clue to this collapse.
Reports suggest that over 6,000 employees in India have lost jobs even as the company has put in place a voluntary separation programme for mid to senior execs.
Those taking the hit first are mid- and senior-level professionals. But lower level employees, too, will be hurt later in the year due to sluggish growth.
“The growing realisation among Indian workforce that reskilling is the only way to stay competitive led to a 37% increase in registrations during the February-April period compared to last year," said Raghav Gupta, India country director, Coursera.
Those in support of laid-off workers say the firing policies based on performance reviews are often discriminatory.
The company is letting go of 10% of the workforce, or around 2,200 people.
Defending the industry as a whole, Viswanathan said that early estimates from Nasscom indicate that the IT industry will be net hirers as the year ends.
There is a gentle deceleration in net new hiring growth rate and the emphasis is shifting from scale to skills, said Nasscom.
Tamil Nadu's labour laws provide for aggrieved employees to approach the Conciliation wing of the state labour department to settle disputes with employers.
IT cos have no choice but to lay off some of their mid-level staff to become more agile, said ex-CFO of Infosys.
Cognizant clarified the number of job losses that were being targeted.“The number of senior job cuts will be under 200,” a Cognizant spokesperson told ET.
The ET Top Recruiters Survey found that 10 of India’s biggest recruiters hired a total of 1,175 MBA students from 26 leading B-schools in 2017.
Cognizant slashed its revenue growth guidance earlier and said it was looking at cutting jobs to reduce costs.
Firms are now going big on outplacement and career-transition services for staff who are being let go of.
The nod to set up India's first dedicated IT employee union is a significant moment, the first big breakthrough for techies grappling with prospects of job loss.
The Forum for IT Employees had filed a petition on "layoffs" by the IT giant, alleging that Cognizant was illegally terminating thousands of employees.
Jobs replaced by automation do not go for good. You can beat the gathering gloom in job market by equipping yourself with the latest tech skills.
While there could be pressure on employment in some of the IT sectors, it is not necessarily in terms of literally a job destruction, said Urjit Patel.
Cognizant, Infosys, Wipro won’t disclose how many jobs they cut, but it appears the industry is going through one of the largest retrenchments in its history.
Sundararajan said the industry was continuing to grow at 8-9% this year, same as last year, and reports of massive job losses in the industry were untrue.
According to executive search firm Head Hunters India, job cuts in IT sector will be between 1.75 lakh and 2 lakh annually for next three years.
Global corporations, the paymasters of Indian software vendors, are no longer so keen to ante up for application development and maintenance.
"We are here to create jobs, not to downsize," he asserted after TCS launched a BPO centre here to create new opportunities as part of the government's Digital India push.
Combined capabilities of TriZetto & Cognizant can let us cash in on big opportunities: Rajeev Mehta, CEO of IT services, Cognizant
"We have to retrain and reskill our staff and I think you saw a conscious effort on that over the last couple of quarters….we still have some work to do."
"We are planning to organise a united front of IT employees associations to hold talks with Karnataka govt to resolve the issue," an AIITEA official said..
Infosys had announced that it could hand out pink slips to hundreds of mid and senior-level employees as it carries out bi-annual performance review.
Former employees of IT firms including Cognizant, Tech Mahindra and Wipro in Pune on Thursday filed separate petitions with the Maharashtra Commissioner of Labour against their former employers saying that their services have been terminated illegally.
The stark takeaway from ET's Jobs Disruption survey of nearly 11,000 employees is that the fear of job losses is not overblown but a near-term reality.
"Such reports are incorrect. In fact the industry continues to be a net hirer with over 1.5 lakh people being employed on a net basis each year," Nasscom said.
From around 1.65 lakh employees on its payroll in 2011, IBM's India headcount is expected to slide to one lakh by March this year.
Emerging technology poses a big threat to jobs and companies. It can force companies to rationalise workforce and even finish certain jobs.
In an email sent to employees from Jim Lennox, CTS's chief people officer, said revisions and promotions will be effective from October 1.
Last month, Mahindra Group Chairman Anand Mahindra had tendered apology over the manner in which an employee of Tech Mahindra was asked to quit.
The development on Friday is a hard-earned relief for the eight employees fearing the axe amid reports of higher-than-expected non-performer exits from the IT firm.
The programme gives participants a chance to explore other opportunities while making way for the next generation of leaders to step up.
A bunch from the workforce in Chennai is preparing for conciliation proceedings with the state labour department in what they claim is a fight against retrenchment.
Domestic IT giants are bracing for tougher rules for H-B1 visas in the US and disruptions due to new technologies
The latest contract to be scrutinised is one with Walt Disney, which recently signed a deal with US-based Cognizant Technology Solutions.
Multiple factors — prospect of a stricter US visa regime and the automation of certain jobs in the sector — have led to the latest retrenchment cycle.
"As digital becomes more prevalent we are looking for skills like design talent and data science and we will hire those folks in other parts of the world, the US included."
Though reports of companies laying off employees have been surfacing since long, this is the first quarter in which these many companies have reported a dip in employee numbers.
The need to secure and sustain a good job is critical. Find out how to ensure a stable career and free yourself from job concerns.
Since SMAC is going to revolutionise business models across corporate India, other sectors are also likely to embrace it, creating a large number of new jobs.
Social media is no longer a place for teenagers to post selfies. It can be a powerful tool to make you ready for next career move, to augment job search.
Infosys is paying over Rs 1 crore to more than 1,800 employees in its overseas locations and it plans to hire 10,000 more in the US.
The Indian IT industry, according Head Hunters, is likely grow 8-9 per cent in FY2017 and could grow at the same pace or accelerate in FY2018.
For employees ranked JL5 (job level 5) and below — typically those with less than eight years of experience — the compensation review will be effective from July.
Francisco D’Souza said by implementing IPA technologies, Cognizant is driving savings and transforming core processes to help companies become digital enterprises.
"Layoffs are regular, performance-based things that we do every year. The number is really 300-400," Infosys COO UB Pravin Rao said.
Placement heads across colleges said they are keenly tracking developments on layoffs, visa issues, etc, and ensuring students are kept in the loop.
Retrenched employees claim their former employers pressured them to hand in resignations instead of firing them, thereby saving on the expense of severance pay.
IBM did not confirm the number of employees who will be affected but said that "re-skilling and rebalancing is an ongoing process as we accelerate the benefits of cloud technologies for clients."
Tamil Nadu, home to an estimated four lakh IT professionals, is witnessing increasing job losses typically among middle-level managers.
A few employees of Cognizant recently approached the state Labour Department alleging that the IT company was forcibly taking resignations from employees citing poor performance.
Since the situation may get more acute, professionals may be forced to switch industries and look for jobs in emerging sectors such as fintech or ecommerce.
With opportunities shrinking and markets transforming, a fifth of 40 lakh Indian software engineers are likely to lose their jobs by 2020.
The job cuts are also affecting mid-to-senior employees who are at the centre of the reskilling and restructuring conversations happening across the sector
To retain margins, IT cos are increasing proportion of fixed cost projects in revenue, tightening costs and recruiting more freshers, less experienced staff.
The company did not specify the number of employees that could be asked to leave. Industry sources suggest that the number would run into hundreds.
Large IT services firms, according to reports, are in the process of laying off employees on a scale not seen since the 2008-10 downturn.
"By June it should be over," Capgemini India Chief Executive Srinivas Kandula told PTI today on the sidelines of the Nasscom summit here.
As customers seek to lower IT spend, many Satyam employees fear that Tech Mahindra could look at rightsizing the company.
The IT major, which has most of its facilities in Chennai and Bangalore, is paying employees the full variable pay component this year. Cities that are IT hubs | Nine trends for IT
Nasscom says the software industry, which employs over 3 million professionals, will see a 17% decline in annual hiring.
TK Kurien is poaching star performers from rival firms as he approaches the final stages of a mass cull of middle and senior management staff.
Consumption is critically dependent on employment, and the job market news is not bad. But employers, like everyone else, want strong policy signals.
Indian IT companies like MindTree, Infosys, Wipro deny hiring freeze because of US market worries, analysts keep fingers crossed
Recruitment agencies and experts tracking IT sector warned that these companies are already going slow on hiring experienced professionals.
Plans are also afoot to start massive recruitments in many parts of the world including in India soon, said Infosys CEO Salil Parekh.
Four out of five companies of 500 surveyed by Aon in May said they are not instituting across-the-board pay cuts. And nearly 70% said they would not lay off employees due to Covid-19. Here is a snapshot from a survey done by Aon.
In other news, Sensex jumped 996 points led by massive gains in banking and IT stocks with Axis Bank leading the pack.
The advent of new technology paradigms like robotics, AI, blockchain and IoT is changing how companies and individuals consume technology and for the Indian businesses to remain successful, an update to the technology of tomorrow, today will be needed, Nasscom Senior VP and Chief Strategy Officer Sangeeta Gupta said.
Large IT services companies are all in the process of laying off employees on a scale not seen since the 2008-10 downturn.
Working with a technology company in India today is fraught with risks. Indian IT is facing several challenges which has taken the sheen off the sector.
Over the past few months, Indian IT companies are confronted with closer scrutiny and tighter visa norms in the US, a market that accounts for nearly 60 per cent of India's IT exports.
"Some of the companies which have been named (as undertaking job cuts) have clarified that there is nothing big this year," she said on the sidelines of Broadband India Forum event.
However, experts said the situation definitely does not warrant such panic, especially at a time when residential market is seeing the green shoots of a recovery.
Snapdeal 2.0 will see more layoffs, with some estimating the number to be over 1,000, decimating, a firm that at one point had a staff count of almost 10,000.
The effect of automation and artificial intelligence still is not clear, and they could open up new areas that simply shift tech work rather than eliminate it.