Infosys layoffs: Nasscom defends tech industry, says companies follow performance-driven hiring, adhere to local laws

Nasscom's stance comes amid the controversy surrounding software major Infosys, which recently laid off around 400 trainees from its Mysuru campus as they failed its assessment tests.

Software lobby Nasscom has defended the Indian technology industry's hiring practices, arguing that the industry for long has embraced performance-based hiring and invests in rigorous training programs to equip freshers with relevant skills.

Nasscom's stance comes amid the controversy surrounding software major Infosys, which recently laid off around 400 trainees from its Mysuru campus as they failed its assessment tests. Aggrieved employees wrote to the Central Labour Ministry seeking recourse. The Union Labour Ministry directed the matter to Karnataka's Labour department, which gave Infosys a clean chit on February 27.

Responding to queries from Moneycontrol, Nasscom said in a statement that the global tech industry, which is largely customer-focused, operates on a merit-based system, emphasising high-tech skills to meet evolving customer demands.

"The technology sector in India has long embraced performance-driven hiring, with meritocracy and performance deeply embedded in company culture and always aligned with local laws. Large enterprises recruiting from campuses invest in rigorous training programs to equip students with industry-relevant technical skills", Nasscom said in an email statement to Moneycontrol.

Further, that the industry makes significant efforts in training and reskilling its workforce across various technologies.

"For instance, AI and GenAI training have already impacted over 1 million professionals across the workforce pyramid. Notably, leading publicly listed companies have trained 73,000 employees in Advanced AI Skilling, emphasizing AI-native cloud and embedded AI certifications," it added.

On February 7, software major Infosys laid off around 350-400 trainees at its Mysuru campus after they failed evaluation tests in three consecutive attempts. This is approximately half of the trainees onboarded in October 2024.

As it happens, the trainees were onboarded after a two-and-a-half-year-long wait, necessitated by a macroeconomic slowdown triggering clients of IT companies to halt spending on projects.

Then, company officials had said that weeding out poor performers was necessary to maintain high quality in its ranks, adding that they facilitated transport, counselling and accommodation for trainees who were impacted.

The Karnataka Labour Department on February 27 cleared software major Infosys of any labour law violations related to the exit of trainees, based on the documentary evidence collected.

"They were all only trainees, and some underwent training for three months. We cannot call it a layoff, so these labour laws are not applicable in such cases. A layoff applies only when there is regular employment. There is no employer-employee relationship at all. They were all apprenticeship trainees, not employees," a source said.

India's technology sector is expected to grow at a higher pace this fiscal year.

Nasscom expects the industry's revenue will grow 5.1 percent to $282.6 billion in fiscal 2025, compared with the previous fiscal's 4 percent, with revenue crossing $300 billion in fiscal 2026.

The tech industry will be doubling its headcount addition in to 1.25 lakh new jobs in the financial year 2024-25, from 60,000 in the last fiscal year