It’s hard to see a pattern in the hiring and firing, with some IT majors holding on to staff and others shedding underperformers and not replacing them
Mass layoffs in the IT sector have been happening for the past few years but now – blame it on the pandemic – it seems to be accelerating. An uncertain business environment, lack of projects and investments, and non-performers are the contributing factors. Many IT firms have been hinting at mass layoffs, leaving employees in fear of when it will be their turn to leave.
Most likely to receive a dismissal notice are employees on the bench. These employees are not allocated to any projects and are a resource backup in case a new project comes along. They are considered to be ‘non-billable’ resources, as their cost is not billed to any clients, making them the most vulnerable to layoffs.
Here’s an overview of how IT companies operating in India are looking at layoffs and hirings.
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Cognizant Technology Solutions’ April-June financial report shows around 9,000 employees were laid off during the quarter, more than chose to leave the company voluntarily. Around 68 percent of Cognizant’s workforce are based in India.
Cognizant didn’t blame the lay-offs on the coronavirus though, saying that the headcount reduction was part of its “Fit for Growth” program, announced last October, which aims to reskill, reassign or remove underperformers. This will see the removal of 10,000 to 20,000 mid-to-senior level associates from their current roles, with half of them reassigned internally and the remaining employees eventually terminated.
There have also been departures at the top at Cognizant: Ramkumar Ramamoorthy, chairman and managing director of Cognizant India, and Pradeep Shilige, global delivery head, have left with no replacement named, while Chief Financial Officer Karen McLoughlin will be replaced by Jan Siegmund.
IBM too has resorted to layoffs to reshape its business amid the pandemic. It plans to fire 2,000 employees globally over non-performance, a few hundred of them in India where around 33 percent of IBM’s global workforce of 350,000 are based.
Wipro has not laid off any employees as a result of the pandemic, nor it will lay off anyone in the near future, Chairman Rishab Premji assured attendees at Wipro’s annual general meeting. Wipro’s employee attrition rate was 13 percent for the 12 months to end June, the lowest it has reported in at least 20 quarters. However, it is not replacing all staff that leave: in the April-June quarter its headcount dropped 1,082 to 181,804, after dropping 4,432 in the previous quarter.
While there have been economic headwinds across the industry, CSS Corp has been able to weather the storm with its vertical-focused strategy. “We onboarded over 1,200 new employees in the April quarter when the pandemic was at its most disruptive level. We continue to hire in Q2 and our hiring outlook remains stable in the coming months,” said Sunil Mittal, EVP at CSS, referring to the company’s second fiscal quarter, from July to September. “As part of our learning and development plan, we are continuing to roll out upskilling and re-skilling initiatives across the organization, especially towards digital technologies,” he said.
Indian IT services company TCS has also said it will not cut any jobs as a result of COVID-19. TCS saw the onboarding of 12,000 fresh graduates in the April-June quarter, with 18,000 expected to join in the June-September quarter. TCL reported an attrition rate of 11.1 percent in its IT Services business for the twelve months to the end of June, lower than its rivals.