Forum for IT Employees or FITE, a web-based IT workers’ collective, has urged employees of Cognizant Technology Solutions not to resign voluntarily if asked by the company’s human resources department.
“If the employee resigns his/her job, a month’s salary or three months’ salary should be paid as specified in his/her offer letter. However, if the employee is terminated, a month’s salary for every year of his/her service needs to be paid along with the notice-period salary,” said the forum, which became prominent in the context of media reports about TCS ‘firing 25,000 people’ two years ago.
The missive to employees — via a post on the forum’s official website — has come in the wake of widespread reports that say that the IT services provider is planning to fire anywhere between 6,000 to 10,000 people this month.
UPDATE: FITE has released a new poster in which it claims that employees have expressed their concerns that the total number of people that will be laid off will be expanded to 20,000.
CTS, which has its India headquarters in Chennai, has its annual appraisal in February, and the results of the exercise were released to employees this month.
However, there has not been any widespread lay-offs, according to CTS employees we spoke to.
“We get to know of such things from the media,” said a Kochi-based, senior-level employee. “No one I know has been fired (as part of the appraisal),” she said.
There had been some confusion about whether IT employees are covered by provisions of the Industrial Disputes Act, with the Madras High Court in 2015 refusing to rule one way or the other in case of TCS layoffs. It left the matter to the Tamil Nadu state government to decide.
In 2016, Kumar Jayant, principal secretary for Labour and Employment of the Tamil Nadu, clarified that IT services sector was indeed covered by Industrial Disputes Act in the state.
“IT company employees are free to form trade unions and can redress their grievances through evoking the provisions of the Industrial Disputes Act,” Jayant was reported as saying in 2015.
It is likely that given the policy of Tamil Nadu government on the matter, labor courts in other states will also follow the same process in evaluating whether ID Act applies to IT sector or not.
AUTOMATION & SLOWDOWN
Cognizant, which was growing at a breakneck speed till two years ago, has around 2.6 lakh employees, out of which close to 2 lakh are estimated to be based in India.
From a growth rate of 18% a couple of years ago, Cognizant’s top line expansion has slipped to 7.1% for the last reporting period (Oct-Dec 2016) as the IT services sector grapples with changes in how clients meet their IT requirements.
Instead of using armies of engineers that throng these service providers, clients are increasingly turning to advanced software — often provided by small start-ups — to eliminate or reduce the need for IT manpower.
This has impacted the global IT services business, dominated by talent and companies from India.
In response, most companies have started ‘reskilling’ their employees — particularly their more nimble, younger staff members. They are given training in new technologies and tools even as the firms invest in automation technology to compete with software start-ups that threaten their businesses.
Wipro, for example, has relieved 7,000 of its employees — mostly in the second half of 2016 — from their regular work roles and replaced them with ‘bots’ — software programs that are intelligent enough to be able to do the employee’s job without supervision.
However, these companies also have older staff — so-called ‘project managers’ — who are difficult to be reallocated. Most of these employees stopped doing technical work several years ago and have been managing people since then.
However, with no more requirement of large armies of engineers, the roles for such PMs are shrinking rapidly.
At the same time, many of these senior employees are either unable, or unwilling to return to technical work or learn new languages and technologies. This leaves their employers with no choice but to let them go.
As a result, even as these companies continue to hire fresh talent — both experienced and inexperienced — they are also forced to let go of employees.