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Layoff meter at IT cos in India

With 5 jobs lost globally every minute, little surprisingly the number is piling up in the Indian IT industry too. However, the word `layoff' still seems to be an `untouchable' one for the industry. With majority of the companies linking the job cuts in their companies to `performance'.

Some other less popular terms being used for job cuts are right sizing, voluntary separation packages and workforce optimisation.

However, it is anyone's guess that it is the global slowdown that is pinching these companies. Here's a rundown on the job cuts at IT cos in India

Source : Indiatimes

TCS

India's biggest software exporter, TCS, has asked several employees at its UK office to leave, as the company prepares to trim its payroll costs and cope effectively with the recession.

Mumbai-based TCS laid off most of its marketing team in London, plus a large number of professionals in the consulting division. According to sources, the targets were mainly the high-end consultants who are said to be an expensive lot to keep on the bench, and marketing.

Giving reasons for the layoffs in the UK office, TCS CEO & MD S Ramadorai said that either the contracts of these employees had ended, or can be due to bad performance. He added that going forward in the year, a lot of emphasis will be on employee efficiency.

Earlier, the IT major also accepted that it may go for further job cuts to tackle global economic downturn. The company also ruled out salary hikes this fiscal. TCS has frozen "lateral intake" and the company is reviewing variable pay component on employee salaries. Reports also suggest that the company is planning to increase its working hours by 10-15 per cent over the current 40-hour, five-day week cycle.

Country's largest software company has also reportedly put its 1,000 employees under performance scanner. Last year, the company had asked 500 employees to leave after a similar performance improvement plan.

Infosys

India's second largest software services firm Infosys Technologies has downsized 5 per cent workforce at Infosys Australia.

The subsidiary employs 360 people, a majority of them from Expert Information Services -- the first acquisition Infosys Australia made six years ago.

Infosys board member and director for human resources Mohandas Pai confirmed that there were some separations from Infosys Australia. He said, "We have had an organisational restructuring in our Australia subsidiary and as a result, some positions have become redundant. It is the first time after the acquisition that this is being done."

Earlier reports revealed that the company has put at least 5,000 employees or 5 per cent of its total global workforce under the performance scanner. Some 40-50 sales executives have also been reportedly asked to quit in the last two months. Most of these were located in the US and were from consulting background who are in a client-facing role.

The company has also plans to cut employee bonuses and compensation packages in the months ahead as the global meltdown strains its revenues. Infosys has also extended the period of training for people on the "bench" to 29 weeks from the present 16 weeks because of the ongoing global economic recession.

HCL

IT services company HCL Technologies has asked 450 employees at its Delhi and Bangalore offices to leave. A majority of those asked to leave are on the bench.

According to a HCL Technologies executive, the company had sacked 400 people in Delhi and another 50 in Bangalore in the last one-two months. The firm had earlier asked those on the bench to get assigned to projects or face the prospect of being asked to leave the firm.

Though the company didn't confirm the number of people sacked but indicated that the move was linked to the performance of employees. According to company spokeswomen, "HCL follows a systematic process of performance review and development, and the expectation of the organisation is for employees to meet the stringent performance standards. This is a routine and ongoing process."

Satyam

Tainted Satyam Computer has decided to lay off employees from its sales division in order to meet operating expenses and clear its debts. Nearly 10 per cent of its claimed workforce of 53,000 is engaged in providing support functions.

Satyam's global head of marketing and communication, T Hari said, "We are looking at rationalising employees who provide pre-and post-sales services onsite as part of the cost-rationalisation exercise."

The support staff functions include HR and finance, besides pre- and post-sales services. The company sees support staff as non-billable employees, who need to be moved to billable roles in order to avert huge layoffs.

"But, given the current state of Satyam, trimming of sales force overseas is imminent. We have no plans either to take on board graduates who were offered jobs a year ago," said Hari.

Earlier, fraud-hit Satyam had asked senior mangers to quit including Subu D Subramanian, global head of manufacturing and automotives division and Anil Kumar, a senior vice-president at Satyam's financial services division. The company is likely to ask a number of its senior managers to quit as it looks to make the company a lean organisation before putting the company on the block.

Patni

Last year, Patni Computer Systems too laid off over 400 employees citing non-performance issues.

The country's fifth-largest exporter said that it was part of a routine appraisal exercise, carried out every year to weed out non-performers, and not related to any slowdown issues.

The company, however, claimed it to be an absolutely regular appraisal that is important for any performance-driven organisation. It said that it is something standard that Patni does every year.

Mastek

Around 59 employees of IT service provider Mastek are said to have opted to leave the company, three days after they were shifted to `virtual bench' because of slowdown.

Last month, Mastek announced that it is putting 425 employees on virtual bench for the next 12 months following a slowdown in demand. The company had given two days to the 425 employees on virtual bench, the option of leaving the organisation.

"Over 85 per cent of the 425 employees have chosen the option of the virtual bench. They will continue to be employees of the company and continue to receive a lower compensation for a period of 12 months," a Mastek spokesperson said.

"We will be investing in training and supporting them during this period," the spokesperson said. Mastek has an employee strength of 4,000 in Mumbai, Pune and Chennai. Of the 425, half of them are trainees and the rest junior staff.

Employees on the virtual bench would be entitled to a monthly allowance. They would get 120% of their "fair severance compensation" spread over a period of 12 months, the spokesperson said. The company has said as soon as situation improves, people from virtual bench would be taken back. "As and when business situation improves we will bring them back from the virtual bench to full employment," the spokesperson said.

Motorola

More than 200 people Motorola India had hired just a few months ago to drive its mobile handsets business were reportedly laid off late last year. The company is also reported to have issued pink slips to at least 100 of its 4,000 employees in India in December. I

The US mobile phone maker also confirmed that the India operations will also face job cuts as part of its plan to shed more than 3,000 global workforce. The company did not specify the number of employees to be given pink slip in the country.

According to Amit Chaudhery, communications and corporate affairs head of Motorola India, "The decision (to lay off) is an in-principle worldwide one, to be implemented while evaluating a variety of factors for each market."

Recently, Motorola said it will cut 4,000 more jobs in 2009, in addition to 3,000 announced earlier. Most of the new layoffs will hit the mobile devices business, while about 1,000 jobs are tied to corporate functions and other business units.

Capgemini

IT consulting and software company Capgemini has reportedly laid-off around 2,000 employees over several months in Bangalore, Mumbai and Kolkata centres.

The company reduced the notice period to 30 days from earlier 90 days which means the outgoing employees will get a month's salary instead of three months. According to sources, such a method has been adopted to lay off employees.

Paris-based IT services and consultancy firm confirmed that its target of hiring 40,000 employees in India by the end of 2010 may not be possible, if the current slowdown continues.

Salil Parekh, the company's India chairman, said that the total employee strength of the company in the country was around 20,000. The company might still be hiring but the rate has decreased compared to the previous year when the employee strength grew at 20 per cent. For the current year the company is expected to increase the employee strength by 14 to 15 per cent, which means the addition of around 3,000 employees.

Sun Micro

IT giant Sun Microsystems reportedly laid off over 150 employees in India in January. According to a news report, most of the laid off employees were software developers working at the company's Bangalore office.

The news report adds that the company may go for another round of lay offs soon. This round is likely to impact support staff from departments like marketing, human resources and sales.

In November last year, Sun Microsystems announced that it plans to cut as many as 6,000 jobs as the company tries to cope with plunging sales of server computers to financial firms, market-share losses to bigger competitors, and a spiraling stock price.

The reduction, which will eliminate as much as 18 per cent of the staff, will save $700 million to $800 million from annual expenses, Sun said in an e-mailed statement.

Hexaware

Pune-based Hexaware Technologies too is reportedly trimming its headcount across India.

According to a report in Deccan Chronicle, employees of the company in Chennai, on condition of anonymity, said that they had an open-house meeting at their facility in Chennai with their chief people officer, Deependra L Chumble. At the meeting Chumble reportedly said that the company would be axing jobs and slashing salaries.

The report adds that Chumble said that those employees working at level G3 (staff with two years' experience) and above will have a salary cut of 10-12 per cent. Quoting a team leader at Hexaware Chennai, the news article says that around 500 people are likely to be shown the door over the next three months. Hexaware, however, said that the company has not frozen salary hikes and appraisals.

Yahoo

Global search engine and web services provider Yahoo in December last year laid off 45 people from its India operations as part of its worldwide firing policy due to global meltdown.

The pink slips were in line with the company's guidance given in October for the fourth quarter of 2008, which hinted at terminating the services of about 1,500 employees worldwide during the current quarter.

Company's spokesman said, "Majority of those laid off were from Bangalore operations, while the rest were from Mumbai. The layoffs were based on two parameters -- performance and business realignment."

Interestingly, those who were sacked were given an attractive severance package and some of them were referred to other firms as part of its outplacement service.

Persistent Systems

At a time when IT companies are looking at ways to realign their workforce, given the declining number of clients, Pune-based Persistent Systems has begun evaluating employees in a manner that would enable it to justify any possible manpower restructuring, including a layoff.

According to a person familiar with the development, the company is implementing a procedure that reassesses skill sets of existing software programmers and developers. The move to conduct such a skill test, which evaluates the knowledge of programming languages and tools used by developers, for those working on projects raises questions since such tests are generally conducted at the time of recruitment.

An email questionnaire sent to Persistent Systems in this regard remained unanswered. When contacted, a company official declined to comment, saying the exercise was still in its initial phase and there were no substantial inputs to share.

Persistent employs over 4,000 across nine development centres in India and abroad. According to human resource experts, such a decision possibly points to a layoff in light of the downturn, which has resulted into a downward revision of IT budgets.

GlobalLogic

GlobalLogic, one of the largest outsourced product development companies in India, has laid off about 125 employees. While 108 employees were asked to leave 'due to poor grading in the appraisals' concluded in October, another 17 were told to leave because their 'skill sets fell obsolete'.

The over $100-million company, which has delivery centres in Noida, Nagpur and Pune, confirmed the layoffs but said the figure is 115. Over the last two years, Global-Logic reduced its headcount to 2,000 from 3,000. The company has also consolidated its verticals into three --B 2B, B2C and telecom--to reduce flab and overlap.

In another interesting twist, one of the co-founders and partner Rajul Garg has resigned from the executive management team as the HR head to pursue entrepreneurial activities 'outside the company'. He now just has a position on the board. The company is now on a lookout for a new HR head.