Wipro, Infy layoffs: It is not as bad as it looks as the sector is growing | business-news | Hindustan Times
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Wipro, Infy layoffs: It is not as bad as it looks as the sector is growing

The number of employees being sacked is hardly 1-2% of the IT companies’ overall workforce, such as Infosys, Wipro, Cognizant or Tech Mahindra, so there is hope say analysts.

business Updated: May 12, 2017 16:43 IST
Suchetana Ray
File photo of Infosys Technologies employees at the headquarters in Bangalore.
File photo of Infosys Technologies employees at the headquarters in Bangalore.(AP)

News of retrenchment does not seem to stop pouring out of the $150 billion Indian IT sector. Their challenges are many: Automation, artificial intelligence, global gloom and stricter visa norms. But there seems to be only one solution to these challenges: Layoffs.

But there is hope, say analysts as the medium-to-long-term outlook for the sector is not worrisome.

The number of employees being sacked is hardly 1-2% of the IT companies’ overall workforce, such as Infosys, Wipro, Cognizant or Tech Mahindra.

“Automation has taken jobs and those who have been unable to go up the value chain have been laid off. This is true for most sectors, so it seems that making the IT sector a whipping boy for retrenchments is becoming fashionable,” said Arvind Singhal, Chairman and Managing Director, Technopak Advisors, a Delhi-based management consultancy firm.

Singhal added that the layoffs are just a fraction of the large workforce of each of the home-grown top information technology firms. “The IT sector is expanding, so there is employment,” said Singhal.

Industry body Nasscom, partially agreed with Singhal in its annual review for the past year. While there was a 8.6% growth in the IT sector jobs grew only by 5% in the 2016-17. It also said that there is going to be a 20-25% reduction in jobs over the next three years due to the challenges of work permits and automation.

Wipro is reportedly laying off 600 employees, while Cognizant likely to lay off 6,000-10,000 “redundant and non-performing” employees. The later has also rolled out a voluntary separation programme for directors, associate VPs and senior VPs, offering them 6-9 months of salary.

Infosys and Tech Mahindra have also followed suit.

Infosys’ total headcount for 2016-17 increased 6,320 to 2,00,364 from 1,94,044 in 2015-16. Wipro employs 1,81,482 as of March 2017. Tech Mahindra’s headcount was 1,17,095 as of December, last year and US-based Cognizant employs about 1,50,000 in India.