India IT Outsourcers Deny Talk of Layoffs

Nevertheless, techies are spooked by job fears as demand for IT services slows

Employees with IT firms are spooked by fear of layoffs as demand for IT services slows down. At some of the top IT firms, talk of layoffs among employees and repeated management clarifications are becoming a regular feature. The latest layoff buzz is coming from Wipro, the country's third largest IT exporter. Some employees believe the firm may ask as many as 3,000 to leave because of performance-related issues.

Wipro's HR head Pratik Kumar has categorically denied this. "This is not true. We have no such plans," he told ET, in response to a query on whether 3,000 employees with 2 and 2+ years of experience were under review for performance-related issues and could be asked to leave by December.

Wipro is not an isolated case. Recently, there was talk of Satyam laying off around 4,000 people and following reports in the media to that effect, the chairman Ramalinga Raju had sent a mail to all employees re-assuring them that prospects for the firm were bright and urging them not to pay attention to speculation in blogs and the media. "The mail was sent out to reassure employees because there have been reports in the media that Satyam was handing out pink slips," a Satyam spokesperson told ET.

India's biggest IT exporter, Tata Consultancy Services, which has historically had the lowest attrition in the industry at around 10%, reported a spike in its attrition rates to 13% in its second-quarter figures. The company's global head-HR, Ajoyendra Mukherjee, was at pains to explain that the spike was not caused by any layoffs but because of certain BPO staffers it took on for a specific project.

"Normally, these staffers are taken on a temporary basis but because of the labour laws in South America we had to take them on our payroll. They were recruited for the duration of the project. Since attrition is calculated for the last 12 months, you will see a higher percentage even in the third," he said.

At Wipro, the layoff 'news', which has been spreading through the informal grapevine, coincides with the performance-rating exercise the company does twice a year. "These are not freshers but employees who have been given a 'below expectations' rating in more than a couple of appraisals. This is different from what was reported in the media in September—those people are still under review and the actual number is not 3,000 but closer to 1,000," said one employee. A project manager with one of teams also had similar views.

Involuntary attrition rose to 2.5% in the September quarter for Wipro. In the preceding six quarters, this figure was less than 1%. "Involuntary attrition of 2.5% is due to performance and other aspects. Our process is very transparent, and employees are aware of where they stand. This is an exercise we do every year," Mr Kumar said. To date, there have been fewer layoff rumours about Infosys but the company hasn't been entirely insulated. Shortly after its Q2 results,there were rumours that it had asked 250-300 people to resign following the discontinuation or scaling down of a BPO project. However, the top management denied the reports.

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