Nearly two lakh IT jobs to vanish, says expert
US-based clients are no longer willing to pay more.
Bengaluru: With the IT giants such as Infosys, Wipro and Cognizant among others struggling with lower growth, thousands of employees have been asked to leave. Due to a plethora of factors such as automation, changing business models and strict visa regimes, IT firms in India are opting for rapid cost-cutting measures by handing out pink slips to employees.
According to Kris Lakshmikanth, the CEO of a recruitment firm, Headhunters, nearly two lakh IT jobs will disappear by March 2018. He said that the clients in the US are no longer willing to pay more for the services by Indian IT firms.
As a result, markets have come down. The firms have been reducing the main cost — over 60 per cent of people-related expenses — to counter this challenge.
Earlier, people would leave companies for better jobs or to study abroad. However, of late, employees aren’t willing to leave their jobs easily.
Cognizant has asked employees who earn salary package of 20 lakh and above to opt for separation plan and voluntarily quit the company with severance pay of 3, 6, or 9 months.
“Activist investor Elliot Management, which has more than 4 percent stake in Cognizant, has advised the company to match up to the likes of Infosys and Wipro in terms of growth, which results in rapid cost-cutting measures,” said Lakshmikanth.
A former Cognizant employee, who recently joined a different firm, said that he couldn’t handle the pressure anymore. “The company hired large number of people a few years ago. However, it is now giving notice to employees to perform better or quit the company,” he said.
Mr Lakshmikanth also added that a couple of years ago Infosys had hired 20,000 people from campuses in one day.
However, this year, they have hired only 500 people. It will be even lesser next year.
“Every IT company has got a target to reduce the number of employees through automation,” he said.
However, the companies say that they have just been following a performance appraisal process and employees have been handed out pink slips strictly based on their performances.