Since the last couple of years, mass layoffs in the IT industry has become a trend. Earlier this year, IBM announced the layoff of 5,000 employees citing reasons of "remixing skills." Soon enough, reports of Microsoft laying off close to 3,000 employees due to the shutdown of its smartphone business began circulating the market.
If you are shocked by the number of employees being laid off, hold on to your seatbelts. Earlier this month, Cognizant allegedly laid off 6,000 employees in India alone. Six other companies may follow suit.
Close to 30,000 IT jobs are already in the red zone this year.
Here's the biggest layoff news in the IT industry this month.
1. Cognizant: Under the pressure of stakeholders, or simply as a result of an appraisal related retrenchment, IT giant Cognizant is rumored to be laying off a whopping 6,000 to 10,000 employees on accounts of “non-performance” and redundancy. The company also rolled out a voluntary separation program for VPs, senior VPs, and directors, offering six to nine months of salary.
2. Infosys: According to reports, the Indian multinational technology corporation not only fired a thousand employees but also deferred salary hikes of employees to July at the very least. Coincidentally, Infosys announced plans of hiring 10,000 American workers. This came right after US President Donald Trump’s administration announced that IT companies need to hire more locals instead of issuing H-1B visas to hire Indian employees.
3. Tech Mahindra: A few days after Cognizant’s announcement, Tech Mahindra revealed to be conducting a performance review across the country, and reports say this may lead to 1,500-2,000 employees being laid off.
4. Capgemini: The France-based IT services company is allegedly letting go of almost 9,000 people, which constitutes at least five percent of its global workforce.
5. Tata Teleservices: On May 2, telecom company Tata Teleservices was reported to have fired about 600 employees. This was attributed to the company needing to be able to survive in this highly competitive telecom market in India at the moment.
6. Wipro: As a part of its annual performance reviews, Wipro too has reportedly asked nearly 600 employees to leave. However, there are speculations that this number could reach up to 2,000.
The last time IT companies had such rampant layoffs was during the 2008 economic slump. Business publication, Livemint, speculates a total layoff of 56,000 employees by the end of this year, while other reports allege that lakhs of engineers in India alone could be losing their jobs. Amid widespread despair and panic, industry body NASSCOM released a statement refuting these reports of mass layoffs.
It added that the IT industry continues to be a net hirer with over 1.5 lakh people being employed annually. However, the company agreed that the focus of the industry has shifted from scale to skill and this is just another workforce realignment movement in accordance with appraisals and performance.
"It needs to be appreciated that such workforce realignment is a normal part of the internal process of companies based on their own operational imperatives. Companies evaluate their priorities and business imperatives and continuously align talent to serve their needs and enhance competitiveness," the statement read.
Is this really just another realignment to revamp the workforce and introduce newer skills and technologies, or is the IT industry headed for a massive slump?
UPDATE: In a public statement, Capgemini refutes claims of any layoffs and said, "We have not announced any lay off plan. We expect to recruit more than 20,000 new team members in India this year. We continue to accelerate our training programs in 2017 with over 2,000 India employees having already undertaken up skilling and emerging technologies training alone."