Industry lobby group National Association of Software and Services Companies (Nasscom) has sought furloughs and temporary layoff of surplus employees, relaxing daily and weekly work-hour limits, allowing women to work at night from home and a self-declaration regime to comply with government rules.
Plans are also afoot to start massive recruitments in many parts of the world including in India soon, said Infosys CEO Salil Parekh.
Global Indian giants would come from the IT pack because we do IT the best globally
Company will trim its workforce in the ranks of delivery managers, AVPs, VPs and SVPs.
Many of those laid off were mid- or upper-level techies, with low lateral skills for other industries.
Tata Consultancy Services (TCS), Wipro, and Infosys have deferred hikes. Reliance and Oyo have cut pays.
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.
Companies such as Infosys, Wipro, Accenture, Zensar Technologies, among others, have embarked on a massive upskilling drive to make sure their workforce in India is ready for the next-level jobs.
Infosys expects impact on its revenue since businesses across multiple sectors are hit by the outbreak of the coronavirus. The company sees its business to be hit in all geographies.
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.
Nomura India said consensus Nifty50 earnings estimates for FY21 are down 27 per cent.
"Last year, we had 9.8 per cent growth and the year before 9 per cent growth. We've had a really extremely successful business over the last couple of years, a very strong operating margin and expansion in earnings per share, USD 9 billion in large deals," he said.
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“Going ahead job losses will become more severe because even the organized sector is suffering. But we have overcome many crises before and businesses can survive this. If businesses follow some of the lessons from the 2008 crisis, drastically reduce their fixed and indirect costs, they can get back on the path of revival,” says Narayana Murthy.
Many from India's IT majors who had travelled to client locations on business and work visas, got stranded.
Nandan Nilekani has cautioned that contact tracing apps run the risk of increasing state power.
Talking about the road to normalcy and recovery in the aftermath of Covid19, he said it will take some time but it will give an opportunity for companies to become stronger.
‘I am now comfortable with the pace of change in the system.’
IT cos have no choice but to lay off some of their mid-level staff to become more agile, said ex-CFO of Infosys.
It is upskilling employees which will help it cut attrition and acquire future-ready workforce.
Deputy CM C N Ashwath Narayan, who is also in-charge of IT & BT department, held video consultation with the captains of the industry in light of the disruption caused due to the lockdown, and discussed on the way forward - both for effective implementation of the lockdown as well as the future course to deal with the unique circumstances.
There’s wariness among some of those who have not received increments, considering the Indian IT industry is witnessing layoffs.
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.
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.
Those in support of laid-off workers say the firing policies based on performance reviews are often discriminatory.
A shift is becoming evident in IT hiring. Firms now prefer only those who fit in their new business model.
CPI inflation stood at forty months high of 5.54 per cent in November, up by 92 bps from October. Increase in CPI was mainly led by lower base of food inflation and uptick in prices of vegetables and pulses.
Infosys in its results said it had managed to keep its attrition rate low in December quarter, thanks to salary hikes and higher variables.
Another cause for concern at Infosys is the fact that its pipeline over the last year has seen a greater proportion of renewal deals.
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 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.
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 zero-distance programme was one of CEO Vishal Sikka’s first major implementations at the company. It asks employees to create innovative solutions in each project.
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.
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.
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.
Harsh Goenka, chairman of RPG Enterprises, said one has to pay top management as per market norms and fairness in salary is important.
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.
“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.
"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.
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.
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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.
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.
Of course, Goyal was not taking pleasure in the pain of the unemployed youth. Why he called it as a good sign was because he saw the youth getting self-employed.
Employers all over the world are considering this new model. In just 10 years, you may be working from any place you like, and only when you like to.
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.
Emerging technology poses a big threat to jobs and companies. It can force companies to rationalise workforce and even finish certain jobs.
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.
His total compensation, including bonus and grant of stocks, fell 7 per cent to Rs 45.11 crore in 2016-17 from Rs 48.41 crore in the previous fiscal.
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.
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.
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.
The new policy envisages a detailed documentation of a legitimate employer-employee relationship while the latter is working at a third-party worksite.
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.
Middle-level employees face the twin challenges of their jobs being made redundant by technology and cos preferring employees with emerging skill sets.
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.
Communications on layoffs should be handled sensitively, and not through town-halls, said independent human resource adviser Hema Ravichandar.
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.
Team Infosys on Friday went out of its way to look relaxed and act cool.
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.
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"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."
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.
The latest contract to be scrutinised is one with Walt Disney, which recently signed a deal with US-based Cognizant Technology Solutions.
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.
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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 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.
When asked about salary of freshers not growing in the Information Technology IT industry in the past two decades, Pai termed it as a "great tragedy".
When asked who was more worried about layoff in your company, 66% said it was mid-level employees, 22% senior level managers.
Domestic IT giants are bracing for tougher rules for H-B1 visas in the US and disruptions due to new technologies
Tata Consultancy Services reported flat revenue growth sequentially in the third quarter, the company’s worst performance in at least four years.
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.
Infosys, TCS and HCL Technologies have delivered on their guidance when they declared second quarter numbers.
The employees being axed belong to level 1, 2 and 3, some of them part of the support team. These levels correspond to expertise in fixing problems.
IT companies have been under pressure as it grapples with both tailwinds in terms of currency; and headwinds in terms of US Immigration bill.
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.
Vision 2020 was formulated to motivate people and as a rallying goal , says Sikka
Onsite employee cost as a percentage of revenue came down to 38.5% against 39.3% in same period last year
TCS’ total headcount fell to 385,809 in Q1, while that of Infosys declined to 198,553.
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.
"Whenever there is a downturn, there is always noise about unions coming into play in the IT industry but it never sustained," Balakrishnan said.
"We do it every year. Involuntary attrition at TCS has been about 1 per cent every year in that range and this year, it is no different," Chandrasekaran said.
TCS is a best performing company, last they did 8.5 per cent in constant currency terms.
The chief executive officer of Tata Consultancy Services Ltd. argues the industry’s opportunities today are bigger than they’ve ever been.