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Last Updated : Apr 03, 2020 05:21 PM IST | Source:

Coronavirus impact | IT firms start issuing pink slips; around 1.5 lakh employees may lose their jobs

The industry employs about 45-50 lakh, of which and smaller firms account for about 10-12 lakh. The top five IT firms alone employ close to 10 lakh people

Shreeram M*, a techie working for a small IT firm in Pune, was forced to resign along with six others, in March. A fortnight later, in another ITeS-BPO firm — Fareportal — more than 300 employees were laid off.

This may just be the beginning as HR experts and industry players see around 1.5 lakh employees in India's IT industry losing their jobs over the next three-to-six months.

Aditya Narayan Mishra, CEO, CIEL HR Services, a staffing firm, said majority of these layoffs will happen in small IT firms, who are dependent on a few large clients. Large and mid-tier IT firms will account for the rest.


The industry employs about 45-50 lakh, of which and smaller firms account for about 10-12 lakh. The top five IT firms alone employ close to 10 lakh people.

As novel coronavirus, or COVID-19, outbreak intensifies and enterprises struggle to keep business in order, employees have become the casualty. The entire travel and hospitality industry has been hit. Manufacturing has paused. Some companies such as Microsoft and Apple have already warned investors about their performance in the upcoming quarter.

To track all live updates from the coronavirus pandemic, click here

The lockdown, which in some countries has been extended till May, is not helping matters either. “More than anything, it is the uncertainty that is impacting decisions,” an industry expert told Moneycontrol.

At this juncture, while some have chosen to retain employees, smaller firms have started laying off employees with each project ramp down.

Take the case of Shreeram, who was employed in zCon Solutions in Pune for close to a year. He was asked to leave along with a few other team members when clients with large billings ramped down due to the coronavirus outbreak. “We were asked to resign immediately or face termination. We were told that though we were performing well, the client is not doing so well and had to resign,” he said.

Gurugram –based ITeS-BPO firm Fareportal, which caters to the travel industry, laid off more than 300 employees. Moneycontrol has seen a copy of the termination notice served to an employee. According to a letter written to the Haryana Labour Secretary by Forum of IT Employees (FITE), the IT union has claimed that the company had asked employees to resign by giving a two-hour notice.

It is unclear if the companies will lay off more employees. HR personnel from zCon Solutions maintained that the company has not laid off any employees so far and did not respond to further queries regarding the forced resignation.

In a statement, Fareportal said that the company's employee terminations have been modest compared to other firms. "Many of these people are trainees who have only been with the company a short time. These are the first economic terminations in Fareportal’s 25-year history," the statement added.

This move comes after the company's business, which is primarily dependent on airlines, went down by 85 percent. "We regret these actions, which are part of numerous decisions including pay cuts for executives and the CEO’s salary being reduced to $1," the statement said.

Also read: Coronavirus pandemic | Jobseekers turn to remote working roles

Pavanjit Mane, State president, FITE- Maharashtra, expects the number of people laid off to rise as the situation gets worse. “We are already hearing about bench employees from large IT firms asked to resign,” he said. In addition, employees who were supposed to be deployed in new projects, which are now stalled, are under pressure and are likely to be asked to leave next.

A laid off employee pointed out, the least firms can do is let employees work for couple more months so that it gives them time to search for other jobs.

With hardly any job openings in the market at least for the next few months, techies are going to find it almost impossible to land any job.

Most firms have paused hiring and many startups have announced pay cuts. Narayan of CIEL HR said that recruitment is likely to resume in September-October. “In case of fresh graduates, they may be on-boarded after August,” he added.

However there is still no clarity on how long it would take for the companies to recover. Another expert said, it may take longer for recruitment to resume.

*name changed to protect identity

(The story, which was first published on April 2, was updated with Fareportal's comments.)

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First Published on Apr 2, 2020 09:15 pm
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