IT’s past, present and future: Industry and people will always be important

Layoffs have nothing to do with Trump’s visa stance; its impact will show after rules are framed

There has recently been a lot of angst about the Indian IT industry (IT LAYOFFS). The anxiety has mainly centered around two themes. First: Is the $150-billion industry, which is about 7 per cent of Indian GDP, now heading for a period of stagnation? And second: The impact of the above and other global developments such as visa restrictions on the job market for IT professionals, considering that the industry employs 4 million professionals and indirectly generates many more jobs.

The anxiety tends to breed cynicism, as witnessed by the response to a question in the Economic Times of May 15 “Are laid-off techies paying the price for IT cos’ inability to foresee the future?” A resounding 78 per cent replied “Yes”.

Even more surprising is a mast head quote in the Business Standard of May 19 from Rajat Gupta, the former head of McKinsey: “The Indian infotech industry ‘rightly’ should be in ‘panic’ mode, as it has not kept pace with rapid innovation. Code writing-testing is the most inefficient industry that existed.”

I consider both the question and response to the ET question cynical because the persons who have been let go constitute mostly between 0.5 and 1 per cent of the workforce of the larger companies, and only in the case of Cognizant it is 2-4 per cent. All these numbers are within the range of annual “weeding out” to continuously improve the quality of talent.

Rajat Gupta, for whom I otherwise have the highest regard, in my view should have known that the IT industry moved beyond cost arbitrage at the turn of the century and has progressively embraced solutions around the latest technologies. This is reflected in the fact that Indian IT industry has continued to gain market share. Here we have decline in growth, whereas some of the global leaders have had decline in revenue for multiple quarters. |READMORE…

Pink slips galore: Wipro, Infosys, Tech Mahindra, Cognizant cut India jobs

Tech Mahindra recently fired close to 1,000 employees; Wipro was the canary in the coal mine

 

Once India's global claim to fame, the country's information technology (IT) sector is seeing a spate of layoffs by IT majors like Tech Mahindra, Wipro, Infosys and Cognizant. 

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.

Further, Indian IT firms are witnessing their slowest growth in a decade, while global firms are shifting their budgets from traditional IT services to newer areas such as digital and cloud, which require engineers to engage with clients instead of working remotely. Even as this shift takes hold of the sector, automation is increasingly taking over low-end maintenance work, forcing companies to shift workers to other projects and reduce hiring from campuses. 

Tech Mahindra joins the bandwagon

As reported earlier, software services firm Tech Mahindra has sacked a thousand-odd employees this month. 

However, what happened at Tech Mahindra is not an outlier, other IT majors like Wipro, Cognizant, Infosys and Capgemini are also facing their own share of challenges, and moving to either prune or re-skill their respective workforce. 

“We have a process of weeding out bottom performers every year and this year is no different,” a Tech Mahindra spokesperson said.

As on December 31, 2016, the company’s total employee headcount stood at 117,095, while the software division had 80,858 employees. 

Wipro was the canary in the coal mine

Late in April, Wipro move to sack around 500 of its employees as part of its appraisal process. (Read more) 

The company is reported to have weeded out "non-performers" after a "rigorous performance appraisal". 

While Wipro did not specify the exact number of affected employees, the company said it “undertakes a rigorous performance appraisal process on a regular basis to align its workforce with the business objectives, strategic priorities of the organisation, and requirements of our clients”.

“This systematic and comprehensive performance evaluation process triggers a series of actions, such as mentoring, retraining and up-skilling. The performance appraisal may also lead to the separation of some employees from the company and these numbers vary from year to year,” it said. (READ MORE)