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Last Updated : Jul 13, 2020 09:25 PM IST | Source: Moneycontrol.com

IT companies may see more layoffs as sector struggles amid COVID-19: Report

With projects scarce, employees without active project assignments would be the first out the door, analysts say.

A string of layoffs by information technology (IT) companies is reportedly ongoing – globally and in India, as the sector struggles with lack of projects and a comparatively excessive workforce during the current COVID-19 pandemic.

Besides the new economic volatility, the sector has over the past two years progressively shifted towards automation and related technologies, making companies reduce employee headcount. The coronavirus pandemic it seems has only accelerated the process, as per a Mint report.

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Globally, International Business Machines Corporation or IBM is firing 2,000 employees, including an estimated 100 or so from India – which accounts for 350,000 of its employee strength, it added.

The company did not respond to queries, the paper said.

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Among other ITeS companies, Cognizant has laid off thousands. It employs 290,000 globally of which over 200,000 are Indian. A company spokesperson said performance was the deciding factor and is a “normal process.”

Accenture is also cutting 900 jobs in the UK due to low demand, but beyond this has not planned “extraordinary global workforce actions”, an India spokesperson for the company said.

And while others such as HCL Technologies, Infosys, Wipro and Tata Consultancy Services (TCS) have not announced massive layoffs, performance-based cuts could be possible amid COVID-19.

With projects scarce, those 'on the bench' or without active projects are considered 'non-billable resources' and would be the first out the door, Sanchit Vir Gogia, CEO and chief analyst at Greyhound Research told the paper.

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First Published on Jul 11, 2020 04:04 pm
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