The truth about layoffs in India's IT sector
The dust seems to be far from settling on the din around layoffs in the IT sector. Between the last time I wrote a similar column in this space and now, another IT major has resorted to layoffs.
Tech Mahindra is reportedly laying off an estimated 1,500 of its employees at various levels in the organisation. The company has clarified that it is part of a procedure to weed out bottom performers every year, and that this year wasn’t any different.
Panelists on television channels have been crying hoarse how the sector will lose a lakh jobs in a year, and how this spells big trouble for the Indian IT sector that has been an aspiration for mostly middle class job seekers.
On the other side is the government and Nasscom, the apex industry organisation, who say everything is fine with jobs in the sector, and companies will also be hiring a good number, just as they resort to a routine pruning of their workforce. But the truth really seems to be somewhere in between.
The repercussions that the IT sector is facing from protectionist governments in the US and Australia have been far underestimated.
The IT sector should have seen this coming, because much before the election of a right-wing president in the US and his pronouncements of tight visa norms for Indian IT professionals, many companies had already begun to take a hard look at their workforce, especially their senior ones with 10 or 15 years of experience.
But once the US moved in with bills that made outsourcing not only tougher but more expensive, and Australia announced scrapping of its 457 visa programme that allowed their businesses to employ foreign workers for four years in skilled jobs, the internal pruning within IT companies began to get more intense.
Contrary to what the IT companies say about weeding out non-performers at the junior level, the reality seems to be that even senior employees are getting the boot. This could be due to two reasons: First, the easy-to-understand reason is that it is tougher to re-skill senior employees in new generation technologies such as artificial intelligence, internet of things and cloud computing.
In many instances, the IT companies would argue seniors are unwilling to change or are slow in grasping new technologies. But the issue that could be more controversial is when experienced personnel are removed to cut wage costs, in anticipation of hiring local workforce in protectionist regimes at higher wages. That clearly looks discriminatory, but again, how else can companies gear up to the big changes that are happening all around?
But what is the level of layoffs?
Industry insiders say while layoffs are a reality, it hasn’t blown up into a crisis yet. However, over time, there could be more layoffs, but there could be equally big hiring as well, because building a new workforce that is receptive to the changing world of technologies becomes imperative.
Things may not turn out as bad as the doomsayers who predict the sector’s death on television screens, but it is definitely time to realise jobs in IT sector as not as cushy as before, and that they are just as vulnerable to changes in the business environment as manufacturing jobs or jobs in the retail or media world are.
The most desirable then, would be for both jobs seekers and existing workers to be prepared for big changes, just as companies brace themselves up for change too.
Fighting these layoffs would be futile, unless that change in favour of new technologies is recognised.
(Courtesy of Mail Today.)