The axe-files: IT workers in Chandigarh panicky on lay-offs plaguing sector | punjab$chandigarh | Hindustan Times
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The axe-files: IT workers in Chandigarh panicky on lay-offs plaguing sector

5-10% of 17,000-odd work-force in the city could be asked to leave over this fiscal with the US mandating that only Americans are hired by tightening visa norms

punjab Updated: May 17, 2017 11:34 IST
Madhusheel Arora
IT workers

IT firms move to protect profitability and growth with appraisals deferred to July.(Getty Images)

Chandigarh will also be hit by the round of lay-offs that is likely to plague the Information Technology sector this financial year. Usually, a decision based on annual or bi-annual performance appraisals in the $140-billion industry, this year’s process will result in more people being asked to go than usual, as companies move to save costs due to poor growth and pressure on profitability. For the first time since 2009-10, bellwethers like TCS, Infosys and Wipro grew slower than industry body, Nasscom’s 8.6% growth forecast in constant currency terms, even as profitability declined.

“I have been with the company for more than a decade. Now, I am being given hints to resign. The traditional model of hiring low-cost employees at cheaper locations like India and than sending them overseas to earn larger revenues as an IT-business model has fallen flat,” says a senior professional (not wishing to be named) with an IT bellwether at the IT park. “Our appraisals that were to be effective from April 1 have already been frozen till July,” he adds

Trump’s protectionist stance raises costs, leading to stricter appraisals

Firms will ask more employees to go to comply with US president Donald Trump’s policy that only Americans will be allowed to work on IT projects in that country. This raises costs for the companies as they can no longer send employees from India to work there, a proposition that has been less costly. Infosys has announced plans to hire 10,000 US citizens over the next two years. Others companies have done the same.

The number play

In the tricity, major players like Infosys and Tech Mahindra could also push out more people than their usual yearly count. From around 1%, the number of ‘poor performers’ could be as much as 3%, on average, for the industry that employees around 7.6 lakh people nationwide. In some cities like Chennai, aggrieved workers have approached the labour commissions and legal cells in protest.

Versions

Industry body Nasscom has said that reports on job cuts are incorrect, saying that the industry will continue to hire 1.5 lakh people every year, but the focus for selection will shift from scale to skill.

“There are no jobs cuts happening,” said Somit Kapur, associate operations head, Tech Mahindra SEZ.

“There are no layoffs. A continued low feedback on performance could lead to ….separation of an individual, but only after feedback. We do this every year and the numbers could vary across performance cycle,” said Sahana Jose, from corporate marketing of Infosys in an email reply.