Leadership has a role to play in alleviating pain through communication and transparency. Nevertheless, there will be pain.
Unionization of the industry is not a solution as it is accompanied by erosion of competitiveness.
As the Facebook Group “We are Against TCS LayOffs” continues to grow with over 16,322 Likes and counting, TCS is feeling the heat of ex-employees that have been asked to go in the last few weeks. While the management was likely to comment on the issue in its December quarter earnings on 15th of January, it sought to do some damage control on Tuesday by denying rumors of large-scale layoffs circulating on social media. There are wild speculations about the number affected — from 3,000 to 30,000. In its statement, TCS said: “Given the persistence of these rumors in the social media, we would like to place on record that TCS has not initiated and is not planning to initiate any large-scale exits of any section of its staff in any part of the organization.”
As an exception, TCS shared data on the actual number of “involuntary separations” over the last three years. “The involuntary attrition for the first nine months of this year has been 2,574 employees, which represents 0.8 per cent of the total employee strength. The corresponding numbers for FY14 and FY13 were 2203 and 2132 respectively. The total involuntary attrition for the current fiscal year will be around 1 per cent.” At the end of September 30, 2014, TCS had a total headcount of 3,13,757.
A Chennai-based group of professionals called the Young Tamil Nadu Movement has threatened to take legal action against the company for laying-off employees. According to the International Business Times, large trade unions such as the All India Trade Union Congress (AITUC) and Centre of Indian Trade Unions (CITU) have asked software engineers to resist the workforce cut. In the interim, the Madras High Court restrained the company from terminating the services of a pregnant woman for a period of four weeks. The 32-year-old woman said in the petition that she was served termination orders on December 22, 2014, and she was to be relieved from service on January 21, 2015. TCS, on its part, said: “We haven’t received any court order regarding this. TCS conducts its performance appraisal process in a fair and professional manner. In this situation, we will review the issues raised in a responsible and considerate manner.”
There are many conversations that this situation brings to the table that are intrinsically linked to rapid changes in employer-employee relations, the socio-demographic fabric and in skills required for business. This is an eye-opener for the IT workforce. No job is guaranteed.
- The aim of a company is not to provide employment. The objective of any business is to bring short and long-term value to shareholders. In doing so organizations will strive to hire, retain, fairly compensate and nurture the best talent, because it makes business sense. The question that arises when there is a loss of balance in that relationship is: What if productivity, skills, performance is not according to salary package?
- There is a radical shift in the foundations of employer-employee relations. The responsibilities and obligations shift from a parent-child relationship to an adult-adult relationship. The relationship should be mutually beneficial as any other bilateral agreement. Every year thousands of software employees leave their organizations. Why does nobody create an outrage when an employee decides to quit?
- Development is an individual’s responsibility. While organizations should facilitate and provide opportunities for development, employees are responsible for their own skill upgrade. People who invest in themselves will always find a job. With technology innovation increasing, skills connected to digital and new-age technologies will be required. Whose responsibility is it to keep oneself updated with new skills required for the future?
There is no denying that layoffs are difficult and painful; whichever way it happens, it creates organizational pain. Leadership has a role to play to alleviate this pain by communicating, being transparent and upfront. Nevertheless, there will be pain.
But unionization of the IT industry is not the solution. It could kill this $110 billion software sector by bringing lack of competitiveness and curtailing its ability to regulate itself, which is the foundation for innovation and growth.