Silent sacking grip Indian IT sector, impact over 20,000 employees

Silent sacking grip Indian IT sector, impact over 20,000 employees

According to data shared by the All India IT & ITeS Employees’ Union (AIITEU), around 20,000 techies lost their jobs in ‘silent’ layoffs in the IT/ITeS sector in India in calendar year 2023. AIITEU believes that the actual number is higher and yet to be reported. These layoffs happened across IT services companies of all sizes, according to a report of DEBANGANA GHOSH & RESHAB SHAW PUBLISHED BY MONEYCONTROL.

The most common way to do a silent layoff is to give an employee 30 days to find a new role within the same company. If the employee can’t, then s/he is asked to leave.

Silent layoffs have been a common practice among many firms to let go of employees, wherein they are compelled to resign in a discreet manner.

In 2024 alone and just among the top India IT services companies, about 2,000-3,000 professionals lost their jobs, according to IT employee union Nascent Information Technology Employees Senate (NITES).

“There are multiple ways in which companies are removing employees, and those who resist will be terminated (immediately). Once your relieving letter marks you as “terminated”, then it becomes very difficult for that person to find another job,” said Harpreet Singh Saluja, president, NITES.

Employees are also made to sign non-disclosure agreements (NDAs), in some cases, to get their full payout, said Saubhik Bhattacharya, General Secretary, AIITEU.

Also read: Nucleus Software Appoints Swati Patwardhan as Chief Human Resources Officer

According to Bhattacharya, it doesn’t end with downsizing teams; existing employees are now being made to work for 14-16 hours each day, compared to 10-12 hours a couple of years back.

“We are observing this across all companies. With the intention to downsize and improve profit margins, companies are increasing the number of hours each employee works,” Bhattacharya told Moneycontrol.

These layoffs are happening irrespective of the size of the companies.

Teradata, which is a San Diego-headquartered cloud analytics and data platform company, laid off about 35-40 employees from its Hyderabad campus at the end of last year. This came after the company had previously let go of about 1,100 employees globally, including in India, in 2022, sources in the know told Moneycontrol. Going by its employee base numbers on LinkedIn, Teradata has over 10,000 employees globally.

Boston-headquartered financial services company State Street took over joint venture partner and technology service provider Atos Syntel’s operations in India last year. As per sources, around 400-500 employees were let go in India in March 2024 as a part of streamlining operations.

Several employees and industry sources told Moneycontrol that this is also happening across Accenture, Cognizant, and Infosys.

In fact, multiple sources said that Infosys has laid off nearly 200-500 employees across campuses in 2024, though this has been done by asking them to resign voluntarily.

Both Infosys and Atos Group denied laying off employees.

In a statement, Shaji Mathew, Group Head, Human Resource Development, Infosys, said, “We would like to clarify that there have been no layoffs at Infosys. As an organization, we have consistently focused on high performance and exemplary work ethics. We are continuously investing and reskilling our employees for seamless career transitions, with an aim to enable all our employees to stay qualified and proficient in an increasingly AI-powered global industry ecosystem.”

A spokesperson for Atos Group said, “The Atos Group in India has not implemented any large-scale redundancies during the current year. Please note that State Street took full ownership of its joint venture with the Atos Group (State Street Syntel Services Pvt. Ltd.) in 2023.”

“This is a normal course of business for a global organization, which sometimes means re-aligning our people to our priorities. We do not take these actions lightly and treat any departure with utmost respect and support,” a Teradata spokesperson said, in response to Moneycontrol’s queries.

The spokesperson added, “Teradata is focused on sustaining profitable growth, while remaining agile, and investing wisely. We are a company that competes in a dynamic market, and as technologies evolve and the market shifts, we occasionally adjust our organization to retain and advance our position.”

Accenture, Cognizant, and State Street had not responded to queries sent by Moneycontrol at the time the article was published. The article will be updated to reflect the companies’ views as and when they respond.

Industry experts called this among the record-high layoff years since the financial crisis of 2007-2008.

Experts expressed concern about certain service providers trimming their smaller-sized clients because once they lose clients, they rarely get them back.

This is not a mass layoff but a structured one, and if a particular IT services company wants to lay off 1,000 employees, they will do it in stages. Each month, they will let go of 10 to 20 employees from different offices in various cities. This process will last for three months, and because it’s spread out, it will not attract much attention.

This was also reflected in the trend in overall headcount decline for the top five Indian IT services companies for financial year 2024. The five companies are Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, and Tech Mahindra. In FY 24 together more than 69K employees lost jobs in IT sector companies around performance and other things.

Experts say Indian heritage IT services providers have changed their operating models, wherein they want to make every technical person a billable resource. A billable resource means an employee who has been deployed in some or other project, wherein a client pays for the work she/he does.

Source: moneycontrol

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