Khalpat Posted January 5, 2015 Posted January 5, 2015 http://profit.ndtv.com/news/corporates/article-tcs-layoffs-end-of-it-golden-age-or-just-business-as-usual-722721?pfrom=home-lateststories Tata Consultancy Services has had to spend the first few days of 2015 firefighting rumours about mass layoffs at the company. A senior TCS official told NDTV that "non-performers" have been asked to go, but denied reports that the company is firing 25,000 employees. "Workforce optimisation is a continuous process and this leads to some amount of involuntary attrition...there is nothing out of the ordinary. Only 1 per cent to 1.5 per cent of employees will be impacted," the official said. Which means that 3,000 to 5,000 employees may have been asked to leave by the company; TCS - India's biggest outsourcer - employed 3.10 lakh people as of September 30, 2014. Concerned over reports of mass layoffs, some former IT employees have created a Facebook page called "Forum for I.T. Employees", which has already received nearly 9,000 likes so far. On the page, some of the employees have allegedly posted termination letters, and the headline says, "We are against TCS layoffs." P Parimala, one of the founders of the forum and an ex-Cognizant staffer, told NDTV that most employees allegedly sacked by TCS belong to the mid-management. Some employees were recalled from offshore projects and handed termination letters, she said. "Employees who have contacted us complained about lack of communication and transparency... We are planning to approach the government for action," She added. Asked for a comment, the TCS official said some people want to "leverage the situation" and termed the allegations as "malicious". Pramod Kumar Srivastava, a Bangalore-based business consultant, says layoffs at TCS have attracted a lot of attention because the number of people reported to be sacked are too high. "Besides, labelling people as non-performers is not good... People thrown out of a company don't like to be labelled as they have to go and look for a job," he added. Analysts say trimming mid-level employees is a common practice in the IT industry, where the employee pyramid has got skewed. (Read the full story here) The quest for higher margins and increasing automation in the IT sector is also taking its toll on hirings. According to Crisil, hirings in the IT sector are likely to drop by 50 per cent over the next four years. (Read the full story here) For employees, such reports signal the end of a golden era for India's over $100 billion outsourcing sector, which employs over 30 lakh people - nearly one quarter of total private sector jobs in the organised sector. The layoff controversy comes at a time when IT companies are gearing up to report their December quarter earnings. Q3 results for most IT firms are likely to be weaker because of cross-currency hits and also because the December quarter is considered to be seasonally weak as it has fewer number of working days. (Read the full story here) Shares in TCS closed 1.52 per cent lower at Rs 2,540.25, underperforming the broader IT sub-index on the BSE, which closed 1 per cent lower. I have heard rumor that other IT giants are also planning to do the same for employees who are in the company for more than 10 years.
velu Posted January 5, 2015 Posted January 5, 2015 samsung is forcing who is having more than 20 yrs exp who are pure managers ( basically all the useless fellows :P ) .. they are forced to take software competency test to keep their job safe ( problem solving/ programming test )
bulbul Posted January 5, 2015 Posted January 5, 2015 Almost I guess.Lot of people who are in benches for long may have to go. I guess cost factor is finally catching up with India too. There are too many middle level managers without much to do but get handsome pay chekcs,cant go for long. In many companies there are more managers/technical leads than people who does the actual work.
randomGuy Posted January 5, 2015 Posted January 5, 2015 The article says it - Q3 is always weak due to fewer working days & Rupee has been appreciating considerable against all other currencies except for US dollar, so their Rupee revenue takes a hit. Like TCS, HCL also had guided abt weaker Q3 due to cross currency hits. But its a temporary phenomenon i guess. For ex. HCL had few new deals worth 100's of million $ that will start to fructify later in the year
bulbul Posted January 5, 2015 Posted January 5, 2015 The article says it - Q3 is always weak due to fewer working days & Rupee has been appreciating considerable against all other currencies except for US dollar, so their Rupee revenue takes a hit. Like TCS, HCL also had guided abt weaker Q3 due to cross currency hits. But its a temporary phenomenon i guess. For ex. HCL had few new deals worth 100's of million $ that will start to fructify later in the year RG, IT companies always have people ready for future projects, so HCL new deal is not going to make much difference. I think IT companies getting big deals like past is gone [main reason Infy gone down]. Heard some time back IBM scaling down as well.
bulbul Posted January 5, 2015 Posted January 5, 2015 I guess word is 'Restructuring' rather than 'lay off'
vvvslaxman Posted January 5, 2015 Posted January 5, 2015 In USA layoffs like these are regular especially in IT industry. IT is a volatile industry.It is going to be a shock for everyone. But isn't that how IT industry works.
Khalpat Posted January 5, 2015 Author Posted January 5, 2015 They are planning to replace the Mid Level Managers (who joined as a fresher in TCS and are there from last 10 years)and will create new positions for Freshers. Anyways all the big IT giants are on the same path, they are assigning the Tier 2 tasks to Bsc Graduates and renaming it as L1.5 support.
bulbul Posted January 5, 2015 Posted January 5, 2015 In USA layoffs like these are regular especially in IT industry. IT is a volatile industry.It is going to be a shock for everyone. But isn't that how IT industry works. Yes, India was not seen mass layoffs so far [happened during 2008 recession in some companies] so people are not familiar with concept. Its going to be common from now. Only problem is unlike US in India there is no Unemployment benefits. May be they get some 2 to 3 months salary if removed from Job. Another big issue is social it will be difficult for people who lost jobs to deal with relatives/friends.
randomGuy Posted January 5, 2015 Posted January 5, 2015 RG' date=' IT companies always have people ready for future projects, so HCL new deal is not going to make much difference. I think IT companies getting big deals like past is gone [main reason Infy gone down']. Heard some time back IBM scaling down as well. last quarter for infy was the best ever both in terms of revenue as well as Net profit - http://www.screener.in/company/?q=500209&con=1 Vishal Sikka will be of help too. From what I've read, the out look for TCS n Wipro might not be v. strong, but HCL, Tech mahindra ,Mindtree n infy will do decent.
bulbul Posted January 5, 2015 Posted January 5, 2015 last quarter for infy was the best ever both in terms of revenue as well as Net profit - http://www.screener.in/company/?q=500209&con=1 Vishal Sikka will be of help too. From what I've read, the out look for TCS n Wipro might not be v. strong, but HCL, Tech mahindra ,Mindtree n infy will do decent. Not about being strong restructuring is the way to go. It deals are not same like how it happened few years back. Now you get mainly small deals. Also cost is increasing and competition is there from small countries.. One more is localization, now to get order most countries/regions wants more jobs to locals. Another reason is most of the jobs are now automated [wherever possible]. A decade after IBM put India at the core of its global strategy for software services, by building an army of engineers, the company is shedding staff, scaling down investments and even shuffling the top leadership in the country. Already, from around 1.65 lakh employees on its payroll by 2011, IBM's India headcount has now fallen to around 1.13 lakh and set to slide to 1 lakh by March 2015, according to people familiar with the company's plans http://articles.economictimes.indiatimes.com/2014-10-29/news/55558836_1_ibm-india-indian-institute-ibm-employee
randomGuy Posted January 5, 2015 Posted January 5, 2015 Yes' date=' India was not seen mass layoffs so far [happened during 2008 recession in some companies'] so people are not familiar with concept. Its going to be common from now. Only problem is unlike US in India there is no Unemployment benefits. May be they get some 2 to 3 months salary if removed from Job. Another big issue is social it will be difficult for people who lost jobs to deal with relatives/friends. Its not such a bad thing to get laid off (unless you have taken a loan) because of the nature of work which is cr@p
velu Posted January 5, 2015 Posted January 5, 2015 Its not such a bad thing to get laid off (unless you have taken a loan) because of the nature of work which is cr@p people are ready todo that crap work for their living :winky:
randomGuy Posted January 5, 2015 Posted January 5, 2015 Not about being strong restructuring is the way to go. It deals are not same like how it happened few years back. Now you get mainly small deals. Also cost is increasing and competition is there from small countries.. One more is localization, now to get order most countries/regions wants more jobs to locals. Another reason is most of the jobs are now automated [wherever possible]. http://articles.economictimes.indiatimes.com/2014-10-29/news/55558836_1_ibm-india-indian-institute-ibm-employee you are right. still dont see the annual revenues going down. Maybe they will increase at much slower pace or will stabilize. And to increase margins, they may fire people.
randomGuy Posted January 5, 2015 Posted January 5, 2015 people are ready todo that crap work for their living :winky: right, also sometimes they cant get themselves to resign. evryone wants change, or a break, and then maybe explore better opportunities in various fields (not just s/w)
velu Posted January 5, 2015 Posted January 5, 2015 you are right. still dont see the annual revenues going down. Maybe they will increase at much slower pace or will stabilize. And to increase margins' date=' they may fire people.[/quote'] if TCS is growing it doesnt mean that they wont fire surplus people.. some of my friends became people managers after 5 or 6 years who in turn wont be contributing anything significant in the near future
randomGuy Posted January 5, 2015 Posted January 5, 2015 if TCS is growing it doesnt mean that they wont fire surplus people.. some of my friends became people managers after 5 or 6 years who in turn wont be contributing anything significant in the near future ofcourse. 'Growing' means revenues or the top line is growing. Then there is operating margins or the efficiency which also contributes to net profit. and anyways, tcs was known as closest to being a sarkari company among all IT cos. ...
bulbul Posted January 5, 2015 Posted January 5, 2015 ofcourse. 'Growing' means revenues or the top line is growing. Then there is operating margins or the efficiency which also contributes to net profit. and anyways, tcs was known as closest to being a sarkari company among all IT cos. ... Once TCS does this all other Indian companies start this.
CSK Fan Posted January 5, 2015 Posted January 5, 2015 The age of Analytics has arrived. In India and the world. But maybe that is because I am biased towards my line of work
Raghav_12 Posted January 5, 2015 Posted January 5, 2015 IT golden age?? Don't know when that was. The kind of work that Indian IT companies did, can not be passed on as the golden by any stretch of imagination. It has gone further down in last 5 years or so with clients in US/Europe realizing that they are robbed in daylight if they give managed services project. Now they do all their work in staff-augmentation work where role of indian IT companies has been rendered just as Body-Shoppers. Unfortunately most of the middle management to senior management happy to do that to meet their number and in process they keep ensuring that future is bleak. About middle management in Indian IT companies, one should be surprised by seeing majority of middle management not getting fired, instead of getting fired. It's such pathetic work culture and attitude problem. Once a person in 6-7 years of work-ex, he/she would do only managerial work which means basically nothing. They stop developing their skill set. In emerging operating model of staff-augmentation projects, client keeps management with them and would just take skilled resources or resources who can contribute in projects and that leaves these so called managers useless and jobless. Most of them need a good kick up their rear. No wonder TCS planning to fire them.
Recommended Posts