Layoff in IT industry, Who is next?

TCS, the big IT company started it on Feb 2008 with the layoff of thousands of employee, then Wipro and Satyam. Report says wipro layoff 2500 employees and Satyam 4500 employees. All of them has given the same reason “unable to meet the performance requirements of the company”. It seems the days of pink slips have come to haunt Indian IT pros. Though all companies have termed these terminations performance-based, it is anyone’s guess that global slowdown has started hurting Indian IT cos. Some of the recent layoff are…

15th Sep 2008, After delayed appraisals and cut in payouts, India’s fourth largest IT service provider, Satyam Computer is reported to downsize its workforce by a whopping 4,500 employees. This translates to a little less than 9 per cent of the 51,000 employees that the company employs.

Company sources reveal that 1,500 employees have been put under the performance improvement plan (PIP), euphemism for employees put on watch list and asked to shape up or ship out. Apart from this, 3,000 others have not been given any increment in the last appraisal cycle, thereby indicating that their services are dispensable.

9th Sep 2008, Wipro Technologies has put about 4-5 per cent of its workforce, about 2,400-3,000 employees, under the scanner for non-performance. Company sources reveal that about 1,000 employees have been asked to leave.

While some would be given counselling to improve their performance, others would be asked to leave. Wipro’s corporate vice-president (human resources) Pratik Kumar confirmed the move. Asked how many employees had been asked to move on, he said the company did not disclose that number, but it was “significantly lower than 2,000”. “I can’t comment on a particular number,” Kumar said, when asked to comment.

In July, Mumbai-based Patni Computer Systems too gave pink slips to 400 employees on grounds of non-performance. Terming it as a routine exercise and not a slowdown setback, country’s sixth-largest exporter said that it is an effort to weed out non-performers.

Rajesh Padmanabhan, vice-president and head, global HR, Patni, said, “This is an absolutely regular appraisal that is important for any performance-driven organisation. It is something standard we do every year. Employees who have got 0-1 rating on a scale of 5 typically form the basis for the first-level shortlist. These are performance-based resignations; we’ve not issued any termination letters.”

5th Feb 2008, TCS has shown the door to most of its software engineers. According to TCS official version, employees with experience of two years and above across the company who were unable to meet the performance requirements of TCS are asked to look for other jobs commensurate with their abilities. In reality TCS and others do not have new orders from US. They plan to lay off tens of thousands of employees in the next six to nine months.

Late last year, the global IT giant IBM had reportedly laid off 700 entry-level trainee programmers (ELTPs) across its offices in India. Zensar too had reportedly given pink slips to 2 per cent of it staff, again the company claimed that it was on performance basis.

Whatever the company says this is the clear indication that the US economy slowdown is pressurizing these indian IT gaints to cut the jobs and the cost… So who is going to be the next company to cut the jobs and give their employees the “Pink Slip”. Is it the start of the downfall of the IT industry as in 2001??

Update: TCS is planning more layoffs…

Also Read:

• HP cutting 24,600 jobs
• Poll – Recent Layoff in IT

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