Layoffs in IT sector

The Information Technology industry in India is in the process of laying off thousands of its employees. The sector that symbolises the emergence of new India is expected to show the doors to over half a lakh employees thus fuelling a sense of despair in the Indian middle class that saw in it a hope and aspiration for their youth.

The industry circles attribute this to two reasons – the trend of automation and the protectionism pursued by the new dispensation in US.

Though these factors cannot be ruled out for the current jolt in the industry, the cause of heart burn among employees is that they are being rated as under performers or non-performers by their respective companies that shall ruin their future job prospects too.

The IT employees and their representative bodies accuse the companies of awarding lower ratings to prevent any possible labour litigation over the layoffs.

The performance evaluation system is such that a section of employees will inevitably be rated as low performers irrespective of the revenue generated per employee.

Therefore, this exercise is only to satiate the thrust for profits which is camouflaged as performance-driven exercise. This view point of employees cannot be simply dismissed without a closer scrutiny.

Though hire and fire policy is not uncommon to this sector, the massive scale of retrenchment is certainly a matter of greater concern.

It’s true that the IT companies that operate in global business are subjected to cut-throat competition and, therefore, ‘perform or perish’ is the mantra. In fact, ‘innovate or perish’ is the new mantra in the liberalised economy, especially, in the cutting-edge knowledge technologies.

However, the concerns over arbitrary performance appraisals to justify large-scale sacking of jobs need to be looked into.

In the era of economic liberalisation, these IT companies receive humongous incentives and tax concessions as they provide reasonably decent employment, promote exports and contribute to economic growth.

The rapid pace with which jobs are being laid off questions the very legitimacy of tax sops to them at the cost of public exchequer.

The industry has its own explanation for this. They are in the midst of reworking their business models to adapt to the fast-changing global business landscape.

The IT firms are increasingly embracing newer technologies and automation tools resulting in replacement of people who perform repeatable and routine tasks.

Traditional maintenance work is getting automated. The advent of artificial intelligence will further redefine the employment landscape in the IT sector.

The Indian IT education and training is yet to upgrade itself to create engineers who can perform more creative, smarter and complex tasks.

The Indian IT skills sector is still engaged in producing an army of mundane engineers. The engineering education, therefore, needs complete overhaul.

The Indian IT majors like Infosys have already announced their plans to employ thousands of US techies succumbing to Trump protectionism.

But, the Indian government is yet to seriously take up the issue of US’ unfair trade practices before the global trade bodies to protect Indian jobs. India should either reciprocate or make the Uncle Sam retreat from his brazen trade regime.