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Last Updated : May 17, 2017 10:47 PM IST | Source: Moneycontrol.com

Even as IT layoff scare catches on, government & IT body shrug it off as normal

While there is panic over job losses in the industry, the government and IT governing body Nasscom say that the current year is no different than any other.

Indian IT companies are just laying off people like it does every year and there is nothing new in that, said IT secretary Aruna Sundarajan recently. This is in the backdrop of a slew of IT companies pruning their rank and file as a result of automation and visa woes.

Recent media reports said that IBM India was planning to cut nearly 5000 employees. However, the company has said the reports are “factually incorrect.”

“This is factually incorrect. We are not going to comment further on rumors and speculation. Re-skilling and rebalancing is an ongoing process as we accelerate the benefits of cognitive and cloud technologies for clients around the world,” IBM spokesperson told the Economic Times.


The news comes at a time when other IT giants like Infosys, Tech Mahindra and Cognizant have undertaken a similar exercise.

While there is panic over job losses in the industry, the government and IT governing body Nasscom say that the current year is no different than any other.

According to Nasccom, performance appraisal generally impacts around 1-3 percent of the total employees. The industry also hires nearly 1.5 lakh people every year. At present, nearly 4 million people are employed in the IT sector.

"I don't know how this narrative is being built," said Aruna Sundarajan and added, "I have categoric assurance that this year's performance appraisal is no different from the earlier years," Sundarajan told NDTV.

However, this does not mean worries for the sector are over.

Automation and digitisation continue to be the main concerns for the sector. The sector will need to re-skill people to match the new emerging technologies.

Nasscom says nearly 50-60 percent workforce needs to be re-skilled by 2020 to meet the automation demands. By 2025, automation is likely to eat into 260 million jobs.

As job creation slows down, over 50,000 techies could find themselves without jobs in coming years.

The recent visa issues in the US too have added to worries of these companies. The US has tightened its H-1B policies, which will force the companies to keep only the high-skilled employees.

Under the new rules, H-1B visa will be given only to the most skilled and highest paid candidates.

While the government is downplaying changes in the IT sector, companies are not so optimistic. The companies have already started laying off people as the focus shifts to digitisation.

Media reports say that Cognizant and Tech Mahindra have let go of nearly 1,000 employees. Wipro is said to have removed 600 employees and Infosys is unlikely to renew contracts of nearly 1,000 employees.

There are reports that the companies are using ‘benching’ to lay off employees. Sources say that companies are deliberately giving low rating to techies and put them on the bench to cut employee count.
First Published on May 17, 2017 12:07 pm