56,000 IT jobs in danger? Infosys, TCS say they're not responsible for mess

In his social media post, an anonymous techie called the recent spate of layoffs in the information technology (IT) sector a "nightmare". The bad news is, the nightmare is unlikely to end anytime soon.

The seven biggest IT companies operating in India, including Wipro, Infosys, Tech Mahindra and Cognizant, are planning to layoff at least 56,000 engineers this year, Livemint reported on Thursday.

According to the report, this projected number is double the amount of layoffs by these companies last year. Mint claims the astoundingly high number was arrived at after "extensive interviews with 22 current and former employees across these seven companies".

The companies concerned are Infosys, Wipro, Tech Mahindra, HCL Technologies, US-based Cognizant Technology Solutions, DXC Technology, and France-based Cap Gemini SA. According to the report, they have denied that the mass layoffs signal a crisis and have attributed the increased layoffs to more rigorous appraisal processes. 

Of course, the news of IT majors handing out pink slips has already been flowing in. On Wednesday, Tech Mahindra let go of around 1,000 of its employees. Tech Mahindra's layoffs, however, were not an outlier; Wipro fired around 500 of its employees in April, and Cognizant has signalled it could let go of close to 10,000 of its employees. (Read more)

However, Infosys has said that it does not plan to cut jobs. 

Aside from the Mint report, earlier reports had also suggested Infosys was planning to hand out pink slips to hundreds of its employees at its bi-annual performance review. 

According to an Economic Times report, Infosys Chief Operating Officer U B Pravin Rao has said, "I would like to put to rest any speculation around planned layoffs. As has been the case in the past, we will primarily see some performance-based exits." 

However, at the same time, India's second-largest software exporter has delayed salary hikes for its senior employees to at least July. According to the report, while the compensation review for employees ranked at 'job level 5' and below would be effective from July, the review for other employees will be effective from the subsequent quarter. 

While Rao's statement might lead to a collective sigh of relief, the fact that the IT sector is facing a churn and jobs are on the line cannot be denied. Speaking to Business Standard in an exclusive interview, Saurabh Govil, head of Wipro's Human resources, explains: "Earlier, we used to learn about new technologies, now it (learning) is a matter of survival. Everything that we were doing before, hiring, training or performance appraisal, we are doing it even now, there is no change. But, I think the parameters in which we define everything is becoming stricter. We are looking at people who could be trained, we are looking at people who have skills in new technologies." 

The overall message Govil gave was that performers didn't need to worry, but adapting to new technologies was critical for survival in the industry. 

Bucking the trend, global software major Tata Consultancy Services (TCS) has ruled out laying-off employees in the near future and instead plans to create more jobs.

According to reports, TCS CEO Rajesh Gopinathan has said that India's largest software exporter would not be following in Wipro or Tech Mahindra's foot steps.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel