Experts say layoffs may continue in Indian IT for 1-2 years

The development comes at a time when Indian IT firms are facing challenges in the business environment and stricter work permit regime in countries like the US, Singapore, Australia and New Zealand.

The churn in the IT sector – which is moving towards increasing automation, use of artificial intelligence and is beset by tightening visa regulations – is likely to affect mid-level employees with 10-15 years of experience the most, as many are averse to learning new skills, industry experts have said.

Cognizant seems to be the worst hit as the company is planning on cutting off as many as 6,000 jobs – representing a whopping 2.3 per cent of its total workforce. Almost 86% of the H-1B visas issued for workers in the IT sector go to Indians and this figure is now sure to be scaled down to about 60% or even less.

Tech Mahindra’s larger rivals, Wipro, Infosys and Cognizant have already initiated similar performance reviews and estimates suggest that thousands of employees in the sector could be shown the door over the next few weeks.

Capgemini is also in the spree of firing their employees. However, Rao has said that there will be performance-based exits after the appraisal. On Wednesday, it was Infosys, while on Thursday there is Tech Mahindra.

Stating that the reports of mass layoffs were incorrect, it said workforce realignment, linked to performance appraisal processes, is a regular feature every year. It was reported that at least 1,000 executives are expected to go. In fact, industry body Nasscom has also said that both freshers and existing employees should look at self-learning to stay relevant at a time when digitisation is causing disruption in the industry.

In the past, between 1% and 1.5% of a large Indian IT firm’s employees would be asked to leave every year on account of poor performance.

However, Infosys has reportedly put over 3,000 senior employees under the category of workers needing improvement.

DXC technology is also in the midst of a three-year plan to reduce overheads and cut the fat.

Cutthroat competition and Jio’s disruptive pricing policy has impacted nearly all of the telecom operators in the country badly. While this has been going on for the last five years, the results are only more visible now.

Wipro was also reported that they are planning to lay off an estimated 1,500 employees across all levels as part of its annual “performance appraisal”.

Wipro is planning to trim the fat by removing unnecessary layers such as project leaders which the company feels are not needed anymore as a result of automation.

According to Gadgets Now, the lay-offs have been done at multiple locations and the sacked employees are being offered a severance package consisting of just one-month’s salary.

The report points to the role reversal that happened for the U.S. and Indian engineers after Donald Trump’s policies.

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