The Economic Times
English EditionEnglish Editionहिन्दी
| E-Paper
Search
+

    Accenture offers 7-month severance payout to staff

    Synopsis

    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.

    Agencies
    Coronavirus

    COVID-19 CASES

    Confirmed
    8,088,851
    Deaths
    121,090
    (This story originally appeared in on Sep 26, 2020)
    BENGALURU: 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.

    The package is applicable to employees voluntarily tendering resignations. The payout includes a three-month salary in lieu of the notice period and an additional fourmonth salary for those who resign voluntarily, sources said.

    TOI wrote last month that Accenture is laying off 5% of its global workforce. India has two lakh of its five lakh employees, and 5% of that would mean 10,000 employees. An Accenture spokesperson said at the time: “This year, across all parts of our business and all career levels, we will identify approximately 5% of our people as our lowest performers, and these individuals will transition out of Accenture. This is consistent with our actions each year.”

    Performance not main consideration for layoffs
    TOI spoke to some employees who said performance was not the consideration in several cases. Accenture did not respond to questions on this matter till the time of going to print. A number of technology companies are laying off people in areas they have less business in, while hiring in areas of demand, such as new digital technologies. Last month, Accenture had said that in India, they are contin-

    A number of technology companies are laying off people in areas they have less business in, while hiring in areas of demand, such as new digital technologies

    uing to hire. But it did not disclose in which areas the hiring is happening.

    Accenture, like others in the IT industry, has seen revenue growth collapse following the Covid-19 pandemic. In the last quarter, revenue grew a mere 1.3%. Hansa Iyengar, principal analyst at Omdia, said it’s all about tighter control on costs. “Accenture still has 70% of revenue coming from ‘the New’ that is all digital and as such it expects to be on the lower end of its guidance. No surprise there. As long as the pandemic draws on it is going to hurt every enterprise and that will impact the service providers.”

    Iyengar said different geographies follow different severance laws. “In the US, the employment is ‘at will’ where the employer is under no obligation to pay severance. In the UK, severance is usually one month for every year served in the company. In South Africa and South-East Asia, it’s 15 days per year served.”

    In Cognizant’s previous round of layoffs, employees were offered severance packages of 12 to 21 weeks’ pay, depending on years of experience, and one week’s pay for every year of service.

    Also Read

    5 Comments on this Story

    Hariharasudan Sethu32 days ago
    Layoffs is a natural process.But companies need to take care of employees who have been productive and have been a value add on for the firms.When firing they must be careful that they dont impact the deserving employees.
    varadharajan balasubramanian34 days ago
    In software Industries the trend will be to hire employees who are young (between 22 to 30) and fire who hare more than 35. Skills or talents have no meaning. What matter to employers is an ever increasing profit from the market abroad or with in India. More people are jumping to farm work or digital work.
    ravi shenoy34 days ago
    The day you go from coding to managing people is when you become non-productive. After a few years of managing people or projects, the ROI from keeping someone with 20 years of experience on the rolls is less than that from someone with 15 years of experience. Continuous up-gradation of skill-sets or ability to innovate is the key to value-addition to the company at every level. The more versatile you are or the more the client values you the better it it.
    And as far as money making is concerned, no one is in the business for charity whether it is the employer or employee. Its all about the money & as an employee you better have your retirement kitty ready by 45-50.
    The Economic Times