IT industry trade body Nasscom on Monday denied any mass layoffs in the sector and said that the involuntary exits of employees are part of regular annual performance appraisal process which is generally in the range of 1-3%. Nasscom vice chairman and Wipro Board member Rishad Premji said, “This year is no different from any other year,” during an interaction on CNBC TV 18. The Indian IT industry recorded a growth of 8.6% for FY17 which is for the first time that it has touched single digits. The sector currently employs close to 4 million people. Nasscom president R Chandrashekar said that there has been no significant shift in the percentage of involuntary exits this year though the absolute number would always look bigger.
Large IT companies have undertaken stringent performance appraisal measures this year to remove the non-performers. Infosys is estimated to have laid off around 1,000 people while it is 6,000 for Cognizant, 350 for Wipro and 1,500 for Tech Mahindra. Including other companies such as Capgemini and DXC Technologies, the total number could reach 20,000. Earlier Nasscom had stated that the industry is a net hirer of 1.5 lakh people every year.
“Skilling and workforce realignment are essential to remain competitive in international markets. It needs to be appreciated that such workforce realignment is a normal part of the internal process of companies based on their own operational imperatives,” it had stated. However, Nasscom chairman Raman Roy said that 50-60% of the workforce needs to be re-skilled by 2020 to meet the new demands in the market like digital. Roy also said technology spend in India is also expected to double in next 10 years with finance and media expected to highest spenders.
The Nasscom chairman said that automation will eat into 260 million jobs worldwide by 2025. On the pressure from the United States government especially on Indian IT companies to hire local Americans, Premji said one needs to separate the sentiment from fact and visa versus business model change.
“Those two are independent things. There is a business model change – because of digital technology. Then there is a change happening because of visa regime.” He also mentioned that it is important to separate the fact from sentiment quoted statistics from the US Department of labour which estimates that 2.5 million tech job shortages by end of 2018. Of which 50% will be computer and IT related.