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Last Updated : Jul 08, 2017 06:08 PM IST | Source:

IT layoffs: A more human approach would help, say experts

The recent dismissal of an information technology company employee over a phone call, which has sent shock waves among people in the industry could have been handled better, experts say

Neha Alawadhi
Moneycontrol News

The recent dismissal of an information technology company employee over a phone call, which has sent shock waves among people in the industry could have been handled better, experts say.

Moneycontrol was the first to report on Thursday that in a 6:45-minute long audio clip, a Tech Mahindra’s human resource executive was heard asking the employee to put in his papers by 10 am the next day or his services at the company will be terminated.


While Mahindra Group’s executive chairman Anand Mahindra and Tech Mahindra CEO CP Gurnani apologised for the manner of sacking on Friday, the audio clip raised several questions about the overall climate in the IT industry on layoffs.

It also brought to light the “brutal” manner in which an employee was asked to leave, while he tries his best to reason with the HR.

“It is not the legality, but the morality of the act that is in question,” said a senior IT industry executive who did not wish to be named. “It is unfair to ask an employee to leave and not be flexible to his or her requests,” he added.

Most companies, including IT companies, have what are known as performance improvement plans which give employees some time to improve if their performance has been unsatisfactory in the past. When followed, these programmes let both- the employer and employee assess their performance.

However, most people Moneycontrol spoke to agreed that firing an employee over a phone call, while the employee pleading with the HR about such a short notice, was in bad taste.

“Finding the right communication for the employee is critical,” said Sangeeta Gupta, senior vice president at industry body National Association of Software and Services Companies said. “The messenger (who informs the employee of the sacking) has to be properly trained. One could do this more humanly,” she added.

Sensitising the exit process teams in such scenarios is critical. “Train the messenger and give them operational flexibility and operational autonomy so that the employee doesn’t feel stonewalled when he asks for an alternative. Nobody can quit in a day. The IT industry was built on human skills and such messaging can have a detrimental effect on employee morale, and also encourage unionisation,” said a senior HR executive at an IT firm who did not wish to be named.

Cost optimisation, like the HR in the audio clip mentions, is a harsh reality at several IT companies as the industry hoes through a period of slowing growth and increasing automation that is making employees with generic skills redundant.

“Companies need to invest in reskilling these people as per need of upcoming projects if their technologies have become obsolete, instead of laying them off,” said Alka Dhingra, general manager at IT staffing firm TeamLease Services.

She added that most IT companies have Uber-like apps that help them map their skills to existing projects. With more and more companies looking to reduce the bench, or a layer of employees who are not assigned to projects, and kept ready for upcoming projects, these kind of apps help them find alternatives.

Many companies also do outplacements, which means sharing a of list of people they are planning to layoff, and share it with vendors to help them getting jobs outside their organisation.

“Outplacement also means calling around within your network to see if anyone is hiring, providing great job recommendations or even calling up your competitors to see if they have any openings. Here companies could also foot the bill for same,” Dhingra added.

There has been speculation of mass layoffs in the IT industry this year as pressures mount. While one media report said the number of dismissals could be as high as 56,000, Nasscom and several IT companies strongly refuted any move to lay off employees.

Nasscom has said the industry will continue to hire this year, with over 1.5 lakh employees being expected to come on board.

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First Published on Jul 8, 2017 06:06 pm
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