News: Indian IT sector quivers due to series of layoffs

Talent Acquisition

Indian IT sector quivers due to series of layoffs

As layoffs happen at massive scale, Indias 150-billion dollar IT industry appears to slow down more than what was anticipated. IT giants - Infosys, Tech Mahindra, Wipro, Cognizant and others are planning to lay off around 56,000 engineers this year.
Indian IT sector quivers due to series of layoffs

 The series of layoffs in the IT Industry has caused huge turmoil within the sector. Major IT companies such as Infosys, Tech Mahindra, Wipro , Cognizant  and others have laid off massively after their appraisal cycle. Reportedly, around seven of the biggest IT firms are planning let go off at least 56,000 engineers this year. The current number is twice the employees laid off by the companies last year.

Unlike the layoffs in the past, the current development has caused a major setback, so much so that, employees are seeking government intervention to save their jobs.  As per the media report, the Tamil Nadu Government is approached by Forum for IT employees (FITE) who are considering their layoffs as illegal. 

Amid rising concerns for protectionist policies with regard to hiring and job creations within countries like the USA, the UK, and Singapore, in addition to countries like Australia and New Zealand, most of the big IT players in India are looking at ways to improve profit margins. As a result, they are working towards changing their business models and an overhaul which is leading to job cuts in large number. 

Tech Mahindra 

Latest in the string of pervasive layoffs from the IT Industry is - Tech Mahindra. The IT firm has downsized around hundreds of its employees on the ground of low performance. As told to media, Tech Mahindra acknowledged that the process of was no different this year, as they annually weed out bottom performers from the company.  The Mumbai-based company, which ranks fifth in the tally of Indian firm, is all set to announce its fourth quarter results. However, still, there is no clarity on the number of employees who would be asked to leave. 

Also, there is no clarity on the job levels that would be impacted the most as the result of redundancies. Tech Mahindra has a majority of its employees in India with 117,095 employees across 90 countries till its third quarter. 


Off late, another biggie of the Industry – Infosys handed out pink slips to hundreds of its mid and senior-level employees after it steered out its bi-annual performance result.  This news brought shivers in the market especially after a similar announcement made by its peers Wipro and Cognizant, who took similar steps to control costs. Interestingly, Infosys recently announced that it will add 10,000 in the US and set up four technology and innovation hubs over the next two years.  

The news gained currency worldwide, as it comes on the heels of two important recent developments. One, the American president signed an executive order last month that warranted a review of employment immigration laws, to promote ‘Hire American’ policies. The move is seen as a pre-emptive remedy to President Donald Trump’s recent scathing attack on Indian outsourcing firms in the IT sector.


Another giant from the IT world, according to the media reports - Wipro sacked around 600 employees. As of December 2016, there were about 1.7 lacs employees working for Wipro. Apparently, before the performance evaluation commenced there were speculations that about 2000 employees would be asked to leave. According to Wipro, the company’s performance evaluation process constitutes majorly mentoring and upskilling but they always have to let some people go. 


In March this year, US-based IT giant Cognizant Technology Solutions also announced a major layoff of more than 6000 employees, after it concluded its performance appraisal process. Up till December last year, Cognizant employed around 260,000 employees globally, with a majority of them (75 percent) working in India. In 2016, they fired around two per cent of their employees, and approximately one percent of their employees was sacked in 2015.  

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Topics: Talent Acquisition

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