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After Cognizant, Wipro, Infosys and Capgemini prepare for layoffs


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At Infosys, nearly 1,000 employees in job level 6 and above (group project managers, project managers, senior architects and higher levels) may be asked to leave.

BENGALURU/CHENNAI: Large IT services companies are all in the process of laying off employees on a scale not seen since the 2008-10 downturn.

Those taking the hit first are mid- and senior-level professionals — those with 10-20 years of experience. But the expectation is that lower level employees, too, will be hurt later in the year as growth in the $150-billion industry slows far more than anticipated and companies move towards hiring more in the US. The situation is worsening to a point where affected employees are beginning to approach labour unions to take up their cause.

Cognizant last week announced a voluntary separation programme for directors, associate VPs and senior VPs.

Some 1,000 executives are expected to go. The company, one of the top performers in the industry, is expected to eventually cut at least 6,000 jobs, or 2.3% of its total workforce.

At Infosys, nearly 1,000 employees in job level 6 and above (group project managers, project managers, senior architects and higher levels) may be asked to leave. Managers at these levels have been asked to identify, in terms of performance, the bottom 10% of their reportees.

Three weeks ago, Wipro CEO Abid Ali Neemuchwala mentioned in an internal conference call that if revenues don't grow, around 10% of employees would be let go this year. The product engineering team is likely to be one of the big casualties. Wipro ended last fiscal year with 1.81 lakh employees. French IT services major Capgemini is said to be letting go nearly 9,000 people, or nearly 5% of its workforce.

A large part of this are erstwhile employees of Igate, the company that Capgemini acquired in 2015. Asked about the layoffs, Capgemini did not deny that some had been asked to leave, but said it expects to recruit over 20,000 new team members in India this year. Infosys said its performance management process provides for a biannual assessment of performance.

Peter Bendor Samuel, CEO of IT consulting firm Everest Group, said industry growth has slowed and the "arbitrage first" segment (traditional IT services) is in secular decline. "When this is added to the pyramid factory model, which requires new freshers to be brought in every year to keep cost low, it results in an excess of more experienced employees," he said. He thinks the most vulnerable employees are those with three-seven years of experience.

Tom Reuner, SVP of intelligent automation and IT services at IT consulting firm HfS, believes that employees have to incessantly reinvent themselves as the journey toward digital transformation necessitates new skill sets and continuous learning. Ray Wang, CEO of Constellation Research, said cloud, artificial intelligence, and software platforms will lead to 20-30% reduction of staffing by 2020.

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