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More Layoffs By Top IT Companies, Snapdeal Cuts Its Workforce By 80%

Grim tidings.

01/08/2017 12:51 PM IST | Updated 01/08/2017 1:29 PM IST
Stringer India / Reuters
Representational image.

Three of India's top IT companies saw significant reduction of their workforce in the quarter ending June, according to a report in Mint.

TCS, Infosys and Tech Mahindra, the leading lights of the $150 billion IT industry in the country, cut down each of their strengths by roughly 1500-2000 employees.

At the end of March 2017, India's IT sector employed 3.9 million people and was projected to add another 150,000 during this fiscal, according to the National Association of Software and Service Companies (Nasscom). However, in light of the growing number of layoffs, this ambitious target seems unlikely to be fulfilled.

Over the last several weeks, companies like Wipro, Cognizant and Infosys have already announced massive layoffs to downsize their existing employee strength. An investigation by Hindustan Times claimed as many as 56,000 people are likely to lose their jobs in the IT sector in India this year.

READ: A 25-Year-Old Techie In Pune Allegedly Jumped To His Death Fearing Layoff

Last month, a 25-year-old techie from Andhra Pradesh, working at an IT firm in Pune, jumped off the sixth floor of the hotel he was staying at, unable to bear the constant threat of unemployment looming over his head. Gopalakrishna Guruprasad left a suicide note in English saying, "In IT there is no job security. I am worried a lot about my family."

Such an incident is symptomatic of the fear that has gripped IT professionals across the country and beyond, especially since the rules of the H1B visa, which allowed high-skilled migrant workers to get employment in the US, were tightened by the Donald J Trump administration. Thousands of Indian IT workers currently resident in the US, or planning to move there with a job, are in a quandary ever since.

The domino effect of panic hit the Indian shores as companies here started firing employees without citing adequate grounds or offering severance packages. On Saturday, a protest rally by techies in Bengaluru, the technological hub of the country, highlighted the insecurity under which workers in the industry are living.

The complaints are all too familiar and have persisted for many years now. Total lack of transparency in evaluation of employees, abrupt demotion or redundancy without giving proper reasons, workers being forced to resign by the human resource teams — these allegations come up every now and then on social media. But there seems to be no quick-fix to the inherently faulty system.

IT workers are not recognised under the Industrial Disputes Act and not allowed to form trade unions. Recently, after major concerns over the retrenchments in the IT sector in Pune were expressed in the Maharashtra assembly, the state government ordered a committee to investigate the matter. But that's hardly going to offer any relief to those who have already lost their jobs or could do so any moment.

In May, a detailed report in Quartz highlighted the plight of IT workers and the attempts they are making to unionise, however informally, over the years. While the Chennai-based Forum for IT Employees (FITE) is only the second organisation of its kind, it has chapters in Bengaluru, Mumbai, Pune, Delhi, Hyderabad, Kochi, Kolkata, and Bhubaneswar already, with over 300 members.

FITE may have limited power to intervene or redress the alleged grievances of employees, but its presence acts as a support system for many who are going through intensely trying times. Complaints have already been escalated to the labour commissioner and hundreds are still employed in the industry, thanks to its backing.

The situation looks much worse in India's start-up sector, especially with giants such as Snapdeal allegedly planning to reduce its workforce by as much as 80%. Such a drastic step seems to have been precipitated by Snapdeal's refusal of a merger offer with Flipkart, a move that Snapdeal's largest investor SoftBank was lobbying hard for.

Anticipating a similar situation in future, one of India's leading tax aggregators Ola recently made radical changes to its stakeholders' terms, giving a boost to the rights of its founders over its investors, which also includes SoftBank.

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