Last two years have seen remarkable stories of new jobs and salaries that raised the hope of thousands of engineering graduates getting ready to pass out. The $110 billion IT industry, hires them by the thousands every year, keeping the engineering education sector gainfully engaged.
Almost always, it’s only the success story that we hear – Infosys planning to hire 16,000, TCS setting a much higher target of 55,000 new recruits, and job portals predicting robust recruiting for the next 2-3 years. What go unnoticed are occasional blips – the layoffs – that are not statistically not as significant, but are imbued with sad stories of people.
Over the last few days, there has been considerable noise about alleged mass layoffs by TCS. Social networks are abuzz with unsubstantiated news that the company plans to send home about 25, 000 “non-performers” by the end of February 2015. Although TCS has maintained that there is nothing extraordinary and it’s only part of “workforce optimisation”, many discussants in social networking and media forums have alleged unfair treatment and a surreptitious plan to downsize the workforce.
According to some analysts, one of the reasons for the retrenchment could be to avoid employees with a few years of experience, who are proving to be costly to the company, and use the same resources to hire more people at the entry level. The seniors, who cannot be inducted into leadership or project management roles – probably due to lack of vacancies and competencies – add no better value than a new entrant. This “workforce optimisation” is seemingly about “cost optimisation”.
This is a problem with most of the IT companies. Most of the industrial scale recruitments are for for “coding” (writing software) which require relatively but basic, skills. If the employees keep doing it without constantly upgrading their skills, they become no better than the new wave of recruits that enter the companies every year. After a while, the earlier ones make no sense cost-wise because the same job can be done by cheaper hands. The company, then talks of poor performance. On the other hands, even if many of them do well, there are not enough senior positions to absorb them.
In their testimonies and comments online, some of the laid off employees, say that they had been performing well, but still faced the axe. They also say that it’s difficult now to find other jobs because fresh recruits are available at cheaper cost.
This is going to be a perennial problem. Recruitment is a strategy for growth for the IT companies, but the scale is so high that the employees hit the glass ceiling too soon. Is retrenchment, to cut the flab and justify it in terms of workforce optimisation, ethical? Is it the new wave of lay offs and worker unrest that India is going to witness?
Reportedly, a group of TCS employees have met the labour commissioner in Bengaluru and complained to him about the alleged lay offs across various centres in India. According to one of them, “first they remove you from the project, and later will ask you to leave the company.” “Employees are asked to sign voluntary resignation letters. We are given a one-month notice period, and are not being given eligible compensation,” is the version of another employee. Employees who lost jobs in Kochi also echoed similar sentiments.
Obviously, the scale of retrenchment is higher because it has encouraged people to get together. A big question that will come up in the coming days is the legal validity of the lay-offs. Are they legally tenable? Shouldn’t the employees and the labour department be notified in advance?
Before more and more IT-professionals join the ranks of unorganised labourers in the country, perhaps it’s time to look at ways to protect the rights of employees in the industry. The IT industry, including the employees, have so far stonewalled the overtures of labour unions. Last year, labour union activists in Karnataka had opposed the five year exemption to the IT sector from the Industrial Employment Act . The Left organisations such as CITU also has raised the need to extend the protection of labour laws and unions to IT employees.
It’s not just the present uproar over retrenchment that calls for legal protection for the IT-employees. There are also workplace issues such as long hours of work, lack of redress mechanisms and severe stagnation.
Time for introspection by the industry and more scrutiny by governments.