IT layoffs: Why is PM Narendra Modi, proponent of Digital India, silent? Staff forum asks

A fresher joined an IT company in Chennai in 2011-12 after paying Rs one 1 lakh as bond. The agreement stated that if he left the company’s services within a year or if the company terminated his services, either which way the employee had to forfeit the bond to the company. Eight months after joining the firm, the employee was sacked with no reasons offered. When he reported to work, the security at the gate took away his ID card and asked him to go home as his services were terminated. He approached Fight for IT Employees (FITE), a union that has taken shape in Chennai and is awaiting registration. “We are fighting his case,” said Rajan Gandhi, vice president, FITE.

In the current situation where mass layoffs in the IT sector is par for course, FITE is taking up cudgels on behalf of employees from various IT companies.

The main grouse that FITE has with the IT majors is the mass layoffs with the oft-stated reason cited as ‘underperformance’. “How can these firms, who recruit candidates after several rounds of talks, tests, interviews, find that large groups are underperformers? What does it say about its selection system and process? What about training? A few employees can be sacked on account of underperformance but not in large numbers as the IT sector in India is resorting to for the past few years,” says Gandhi.

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The sector is emboldened by the weak labour laws and weaker implementation of these laws, says Vasumathi, president, FITE. The forum has been representing sacked employees of IT companies in various state labour courts in the country.

IT sector transformation

The traditional BPO operations model is being phased out and the $155-billion IT industry in the country is trying to reinvent itself to adjust to the advent of automation, artificial intelligence (AI) and machine learning.

According to consulting firm Zinnov, India stands to lose about 94,000 jobs by 2021 due to the increasing adoption of technology.

So the fact remains that with introduction of automation coupled with protectionist stance adopted by the US, UK, Australia and Singapore governments has turned the situation back home bad. But can the IT companies be blamed for the changing situation that is impacting margins?

Representational image. Reuters

Gandhi says that none of the IT majors in the country have reported losses even as they mouth ‘underperfomance’ as a reason for sacking employees. “Shouldn’t underperformance reflect in the bottomlines?” he asks. Another sore point is that some companies give top management higher severance pay. Cognizant offered its top management  – directors and senior VPs – six to nine months' pay as severance package. “Why should lower level employees be treated differently? The top management cannot perform if the lower rung employees do not cooperate. If the IT company has decided to sack its employees, let the same rules of severance packages be followed,” says Gandhi.

Isn’t protectionism in the US, UK, Singapore too forcing IT employees to be sacked? FITE does not think so. It reasons that if that was the reason and coupled with automation the companies are getting fewer projects, they should communicate that in an honest manner with the employees. “When you state underperformance as a reason, the company has thrown a spanner in the future employability of the employee. When IT firms say that only one or two percentage of their large workforce is being sacked, the percentage point may seem small but the fact is it affects lakhs of families. I don’t understand why the government is not taking this issue seriously,” says Vasumathi.

Automation, believes FITE, does not mean the machines will work by themselves. It needs to be operated, monitored and glitches fixed. “Skill people for it. You can’t say no employee is willing to be reskilled. This is a blatant lie,” the association says.

After the Donald Trump administration put restrictions on immigration to the US, Indian companies have started recruiting Americans for the posts there. The move is seen as an attempt to placate the US government but is resulting in lesser jobs in India. A section of the employees have even alleged that the job cuts happening in India is a direct impact of this strategy.

Govt in denial mode

Meanwhile, the government and the IT industry body are in a denial mode. They insist that there are no large-scale layoffs in the sector. “I completely deny and refute that there is any downturn in the employment in the IT sector. It is robust,” Ravi Shankar Prasad, minister for IT, said on Tuesday.

The reality on the ground is wildly different from what the minister and Nasscom see. The top five IT services companies – TCS, Infosys, Wipro, Cognizant and HCL Technologies – hired around 60,000 engineers from campuses this fiscal, as against a little more than 100,000 last year. The reason for the reduction in recruitment at the entry level is on account of aggressive use of automation and technological advances that have rendered the lower level jobs in the sector redundant.

The government is aggressively promoting Digital India programme, says Gandhi of FITE. “Why is the PM silent on the mass layoffs that have taken place in the IT sector, with over 10,000 people having lost their jobs and many more on the verge of being sacked? Isn’t people losing jobs of any relevance to this program or the Make in India initiative?”

Digital India is a flagship programme of the Narendra Modi government with a vision to transform India into a digitally empowered society and knowledge economy.

Gandhi is perplexed by the government’s tardiness to accept the latest in technology. He cites the breakdown of ATM machines post the demonetisation announcement on 8 November, 2016. “Don’t we have the technical know-how in India to avoid these mistakes? More than half of the ATMs in the country use Windows XP while the world has progressed to Windows 10. How does this sync in with Digital India?”

FITE is being run by a collective of IT professionals from different IT/ITeS companies. It was formed in 2008 by IT professionals at Chennai’s IT hub, Tidel Park and fought for the cause of the Tamils in Sri Lanka. It was then called ‘Save the Tamils’. The group felt the name was submissive and made them feel ‘beggarly’ and changed it to Young Tamil Nadu Movement and roped in actors from the southern film industry like Karthik and Surya to ‘get the eyeballs’.

When the movement succeeded, the group decided to focus on other issues that was affecting society like the setting up of the Kudankulam dam, sand mining issues, etc. In 2014 when TCS laid off 25,000 employees, the group decided to do something for the sector that they belonged to. “We changed the name to FITE and took up the TCS layoff issue,” says Vasumati, president, FITE.

FITE members would gather at the various TCS offices across the country, raise slogans, put up banners, posters, spoke to labour department in each of the state government that TCS was located in and filed cases. It went all out on social media to highlight the case and also made special WhatsApp group and pages on Facebook where employees and those that were given the sack could talk. Finally, FITE managed to attract the attention of the management. The group's efforts ensured that 23,000 employees were reinstated.

Tips to staff on layoff

FITE is asking employees to take written statements from the companies that are asking them to leave. Most companies are loathe to issue letters, FITE claims. They also ask employees to ascertain under what reasons are they being sacked and get that down in writing. “The company needs to tell employees under what parameters have they found them unsuitable for the jobs and who is carrying out the process. We also ask employees not to take calls from HR or senior management when they have been summarily dismissed. We want employers to be more open and honest.”

It is a long fight with more employees being sacked in the IT sector. Hopefully more IT personnel will be emboldened to form unions to tackle the menace of mass layoffs.