Wipro has served a three-month notice to many of its bench employees – without pay. If they fail to find a project within the period, their services could be terminated, the company said in an email to affected employees.
Bench employees are those on the company’s payroll, but not assigned to any project.
In an email to the employees concerned, the company said: “Upon the expiry of the extended bench and your failure to find suitable billable opportunity within the said period, the company reserves its right to proceed as per allocation and deployment policy.” Moneycontrol has seen the mail.
This policy gives the company the right to terminate service, if an employee fails to join a project within the given time period.
Though Moneycontrol asked the company about the number of employees who will be affected, there was no reply. However, a source estimated that it could be in a couple of hundreds, with the team leads (those with seven years or more of experience), being affected the most.
While other IT firms such as Capgemini and Cognizant have laid off bench employees in recent times, the Wipro move was a bit surprising.
Only a couple of weeks ago, Wipro chairman Rishad Premji had ruled out layoffs amid COVID-19. He said this during a recent annual general meeting.
In the email, Wipro described the move as being done “in good faith and as a part of our endeavour to support employees.”
During the three-month period, employees can avail leave if they choose to, and they will be on extended bench for the rest of the period.
Employees will receive insurance coverage and other medical benefits, wherever applicable during this period. Cash-based perks, discretionary bonus, or incentive schemes will stop.
“No compensation or replacement scheme or other employee benefits shall be due or payable to you during the extended bench period,” the mail said.
While in bench, employees can access training and skill development modules. “We urge you to undergo as many training as possible to enable you to find a suitable opportunity soon,” the mail said.
These programmes include Top Gear, the internal crowd sourcing platform.
In an e-mailed response to Moneycontrol, Wipro said: “The allocation and deployment policy for India covers those who are not engaged in assignments and have remained unbilled for an extended period of time. The policy is applied upon receiving the employee’s consent and will extend for three months.”
“Wipro will continue to extend healthcare-related and other benefits to these employees. They will continue to receive insurance coverage and remain eligible for the medical assistance scheme, even if they exhaust their earned leaves,” the statement added.
While the scale of the extended bench could be a couple of hundreds in Capgemini, the numbers are likely to be much higher in Cognizant. For the other firms, it is unclear.
Already, for the quarter ending June, headcount has fallen by over 10,000 in India’s top five IT companies - TCS, Infosys, Wipro, HCL Tech and Tech Mahindra. Wipro’s total employee count has been falling over the last two quarters by 5,500.
In a post, the IT arm of the National Democratic Labour Front said that the move was illegal amid the pandemic and the company has to allocate projects for existing employees instead of selecting new ones.
The company on-boarded 7,000 laterals for the last quarter and will start on-boarding freshers from mid-July through the course of the year.
Experts said that in the wake of budget cuts and cost optimisation, options are limited. Even if employees acquire additional skills, three months is too short and will result in increased performance-related layoffs, they said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
