Nasscom must wake up to TCS labour tangle

The labour churn at Tata Consultancy Services (TCS) signifies a new phase in the evolution of India's IT industry - and something that is of profund significance if India is not to mess up its showpiece sector, writes N Madhavan.

The labour churn at Tata Consultancy Services (TCS) signifies a new phase in the evolution of India's IT industry - and something that is of profund significance if India is not to mess up its showpiece sector.

While officially the nation's largest software exporter denies reports that it is laying off thousands of workers and that involuntary exit of staff is under 3% of its huge work-force of about 300,000, ancedotal accounts from freshly organised workers suggest practices under which workers tend to move out as they are sidelined or "benched'" - or subject to remarks that point to the door.

This is happening even as TCS is hiring fresh graduates - estimated at 55,000 in the current fiscal year. The inference would be that younger staff at lower wages tend to replace older ones at higher wages as TCS tries to keep productivity and returns per worker at higher levels.

That may be logical in a simple market economy, but India is certainly not one. Even the US is not one, as we discovered in the uproar against outsourcing.

Most Indian employees in the organised sector assume long-term tenures - though they can live with lower wage hikes. If this is to change, they need to be told that the rules have changed and prepared for this. Apart from this, there is a case for transparency and transition issues that need to be addressed by the industry as a whole. This is even more so as overall wages rise in the face of disruptive cloud computing that challenges the industry.

The National Association of Software and Service Companies (Nasscom) needs to get involved in the issue so that India's blue-eyed boy sector does not get a black eye.