News: Tech Mahindra incident highlights need to handle layoffs better

Employee Relations

Tech Mahindra incident highlights need to handle layoffs better

The audio clip of an IT employee being curtly asked on a call to resign the same day, proves that HR practitioners need to have a re-look at their approach of managing layoffs for organizations
Tech Mahindra incident highlights need to handle layoffs better

While a series of layoffs and structural changes are now becoming an everyday news from the IT behemoths, an employee of TechMahindra has circulated a sound clip of his firing in which he was asked to turn in his resignation letter, as a part of the company’s “cost optimization” plans. As per the clip, the employee was asked to put in his papers before 10 am the next day, and was told that he would be terminated if he failed to do so. 

Even as the clip went viral on social media, Tech Mahindra’s senior leaders have publicly apologized for the incident. “I want to add my personal apology. Our core value is to preserve the dignity of the individual and we’ll ensure this does not happen in future,” Anand Mahindra, the Mahindra group chairman wrote on Twitter, in reply to CP Gurnani (managing director at Tech Mahindra)’s tweet, which read: “I deeply regret the way the HR rep & employee discussion was done. We have taken the right steps to ensure it doesn’t repeat in the future.” 

In a statement on the matter, IT industry body NASSCOM said “The report is related to a specific company and NASSCOM as a policy does not comment on issues related to any individual organisation. NASSCOM would however, like to point out that the IT- BPM industry has been known for setting standards in HR practices across industries, and will continue to do so going forward. NASSCOM believes that transparency has and will continue to remain a crucial element of HR best practices followed across the IT- BPM industry.” 

The HR community is divided on how the situation could have been handled by the company. While some believe that greater empathy was needed while communicating and implementing the decision, others feel that in such scenarios, HR is often a mere pawn in the hands of the leadership.   

Senior HR professional (and Winner: Emerging HR Leader, ‘Are You In the List’ 2013) Sourya Dash, while acknowledging the inevitability of layoffs, focused on the need for empathy in managing them.

As an HR professional, you need to be sensitive, and have tons of patience when you initiate a layoff. The best way to do it, is to come prepared for the discussion and provide enough time to the employee”, he said.

He also spoke of the role of managers as well as senior leaders, in steering such conversations. “Business leaders and/or managers must be a part of the conversation, which I found to be missing, in the case in point. Having said that, I was really impressed to see Anand Mahindra so quickly come out and apologize on a public platform like Twitter. Very few leaders could have done it with such pace.”  

Another senior HR executive (who did not wish to be named) said: “This issue is more deep rooted than just a bad conversation. It is about hoodwinking the labor laws by avoiding any severance pay, and about leadership actively deciding to do this silently by presenting a junior HR with a script, and not coming forward themselves.”  

The Indian IT industry, a 150-billion dollar industry which employs 3.9 million people, is reeling under sluggish job growth, and a series of layoffs. Seven of the biggest IT firms (including Tech Mahindra) will be laying off more than 56,000 engineers this year, and there is a projection of around 2 lakh layoffs in the next three years. In such a volatile scenario, it becomes incrementally important for organizations to handle these layoffs adroitly, at a strategic level. Failure to do so may impact their employee morale, and tarnish the employer brand too.     

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Topics: Employee Relations, Strategic HR

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