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.
The company is letting go of 10% of the workforce, or around 2,200 people.
Analysts said the cost optimisation plan was a routine move aimed at reducing wage costs by hiring more freshers. The company’s margins have dropped significantly under CEO Salil Parekh, as it boosted investments to drive growth. The company is, however, now looking at greater cost savings, since a major chunk of its investments has been completed.
IT cos have no choice but to lay off some of their mid-level staff to become more agile, said ex-CFO of Infosys.
Many of those laid off were mid- or upper-level techies, with low lateral skills for other industries.
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.
There’s wariness among some of those who have not received increments, considering the Indian IT industry is witnessing layoffs.
Accenture, Infy, TechM, Cognizant, MphasiS investing to make workforce future-ready.
Some IT experts think that large deals like this come with low margins and taking over large numbers of people can make it difficult for IT vendors.
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 layoffs in the IT sector this year - from biggies like Wipro, Infosys to smaller companies - have caught thousands of young professionals off-guard.
The H-1B visa is a non-immigrant visa that allows US- based companies to employ foreign workers, typically for three to six years, in various sectors that require theoretical or technical expertise.
Experts say automation, a failure to keep up with new technologies and US President Donald Trump's clampdown on visas is creating industry-wide upheaval.
As manpower costs rise and new projects slow down, Indian IT companies have no choice but to reskill their employees and utilise their full bench strength.
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.
“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.
Two things happened around 2016 that might provide a clue to this collapse.
Those in support of laid-off workers say the firing policies based on performance reviews are often discriminatory.
The growth rate has definitely slowed down because of which opportunities in the industry, especially for new recruitment, is down, Infosys co-founder Kris Gopalakrishnan said.
"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.
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.
"If technology changes and people don't have those capabilities, you've to re-skill them and re-orient them," Infosys's Pravin Rao said.
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.
"Layoffs are regular, performance-based things that we do every year. The number is really 300-400," Infosys COO UB Pravin Rao said.
Infosys has stated that it is in favour of a healthy mix of local and global personnel, even though hiring locals overseas often pushes up operational costs.
The event had its share of lighthearted conversations with actor Soha Ali Khan, Sanjana Kapoor, poetic performances by Sonam Kalra, William Dalrymple, Anjum Hasan and music by The Clinton Cerejo Band.
Harsh Goenka, chairman of RPG Enterprises, said one has to pay top management as per market norms and fairness in salary is important.
Asserting that hiring in the US will not impact its recruitment plans in India, the Bengaluru-based company said it has rolled out campus offers to 19,000 people here.
Team Infosys on Friday went out of its way to look relaxed and act cool.
Domestic IT giants are bracing for tougher rules for H-B1 visas in the US and disruptions due to new technologies
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.
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.
Murthy said while there is no reason to be very anxious, it is possible to protect jobs if senior execs take salary cuts and invest in training employees.
Former Chief Financial Officer of Infosys, TV Mohandas Pai said such "exaggerated" reports are based on a few events and there are attempts to blow them up.
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.
Vision 2020 was formulated to motivate people and as a rallying goal , says Sikka
"Whenever there is a downturn, there is always noise about unions coming into play in the IT industry but it never sustained," Balakrishnan said.
As startups including Zomato and TinyOwl let go of employees because of changed strategies or shrinking funds, experts warn that the recent rush of layoffs could undermine hiring for India’s emerging businesses.
Kharge said there were concerns of amending the IT-BT Act to allow unions. “To bring unionization, there needs to be an amendment in the IT Act. It’ll prove quite tedious to bring about the change,” he added.
Communications on layoffs should be handled sensitively, and not through town-halls, said independent human resource adviser Hema Ravichandar.
Onsite employee cost as a percentage of revenue came down to 38.5% against 39.3% in same period last year
According to a survey released earlier this week, Indian IT professionals are likely to see reduced job opportunities in the next six months.
The company announced on July 8, 2015 that it was cutting 7,800 jobs in addition to 18,000 it cut in its last fiscal year.
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.
The growth in total employees stood at 7 per cent in 2014-15, which came down to 6 per cent the following year and was 5 per cent in 2016-017.
Raj was on a conference call Monday evening with US-based technologists when he collapsed. He was taken to The Chettinad Health City in Kelambakkam by a colleague.
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."
The company said it would give a clearer picture on the company’s prospects in its next meet in October. The September quarter will be better than Q1, it said.
Global corporations, the paymasters of Indian software vendors, are no longer so keen to ante up for application development and maintenance.
Middle-level employees face the twin challenges of their jobs being made redundant by technology and cos preferring employees with emerging skill sets.
In the Nifty50 pack, 30 stocks were trading in green, while 20 stocks were in red.
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.
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
TCS is a best performing company, last they did 8.5 per cent in constant currency terms.
Pai had yesterday accused people, who are making efforts to forge a union in IT industry, of trying to "create a hype, fear-mongering".
Infosys CEO says his company will not lay off software professionals this year, but absorb them in internal projects. Infosys' cash, equivalents cross $2 bn mark
The move comes days after report that hundreds of employees at entertainment giant Walt Disney were laid off and replaced with Indians holding H1-B visas.
The IT employees associations today sought to allay fears of Infosys founder NR Narayana Murthy towards trade unionism.
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.
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.
Intel Corp veteran Debjani Ghosh is set to be president of the National Association of Software and Services Companies — 3 decades after its formation.
According to the 2017 annual report of Infosys, payouts of at least four Infosys executives have increased by over 50 per cent in the previous fiscal year.
Prasad, who also holds the law and justice portfolio, was in Gandhinagar to participate in the 'Gujarat Gaurav Yatra' organised by the state unit of the BJP.
Layoffs are becoming pretty common these days as there were recent reports of job loss in Flipkart, Askme, Ola and Infosys, among others.
To retain margins, IT cos are increasing proportion of fixed cost projects in revenue, tightening costs and recruiting more freshers, less experienced staff.
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.
If various reports are to go by, aggregate job losses at 7 IT companies will be 56k in 2017.
The programme gives participants a chance to explore other opportunities while making way for the next generation of leaders to step up.
"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.
TCS’ total headcount fell to 385,809 in Q1, while that of Infosys declined to 198,553.
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.
The impact will be felt beyond markets and investing. It will hit your child’s education and career plans and your family’s travel.
When asked who was more worried about layoff in your company, 66% said it was mid-level employees, 22% senior level managers.
India Inc is promising better pay hikes of 10-15% for the right talent in 2018 after a challenging year for the job market
Layoffs, shutdowns and funding concerns are episodic blips in evolving startup story in India, bigger structural issue is the way the incentives are currently set up.
Viswanathan will be based in Chennai, and his earlier role - managing emerging geographies - has been given to HR head Ajoyendra Mukherjee.
IT firms are hoping that digital deals will offset decline in traditional services. But any pushback in deals will weaken growth momentum, experts said.
While Sikka cited heightened acrimony with founders at Infosys, the malaise is much deeper, and threatens to become a faultline for Asia’s No. 3 economy.
De-stressing exercises can be helpful for people seeking to come to grips with a layoff, said Ekta Soni, consulting psychologist at Delhi’s Indraprastha Apollo Hospital.
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.
Layoffs are an inevitable aspect of the corporate world, especially in recession. But a poor economy should not be an excuse to cut jobs. Infosys to focus on small buys
Last week, the Sensex hit a high of 29,838 and low of 29,442 during the week. The Nifty50 fell 47.50 points, or 0.51 per cent for the week to settle at Rs 9,150.
"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."
The company intends to send out letters communicating the revised salaries by September and give the increments effective October 1.
A stable corporation is one where every employee is happy, says Narayana Murthy
Here's what experts closer home have to say on the subject of layoffs and how India Inc handled it.
The chief executive officer of Tata Consultancy Services Ltd. argues the industry’s opportunities today are bigger than they’ve ever been.
According to the latest lobbying disclosure reports filed with the US Senate, Nasscom paid a total amount of $1,50,000 to its two registered lobbyists in the first quarter of 2017.
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The daily said companies are able to "skirt the rules for using H-1B workers by outsourcing the actual hiring of those workers to Tata, Infosys and other temporary staffing firms.
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.
With opportunities shrinking and markets transforming, a fifth of 40 lakh Indian software engineers are likely to lose their jobs by 2020.
If you look at our Mode 2 and 3 business (non-traditional spend), that has really grown by 30%, said HCL Technologies’ CEO C Vijayakumar.
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