After Wipro, Infosys, More Tech Giants Face the Heat of Cutbacks

Once dominating the world, the Indian Information Technology sector has now come face to face with cutbacks. After stalwarts of the industry like Infosys and Wipro were affected, India’s fifth largest IT company, Tech Mahindra, may be the next company to follow suit.

According to reports, the company may let go of 1,500 to 2,000 employees on the pretext of annual performance reviews.

On the Basis of 'Poor Performance'

Last month, Wipro let go of at least 600 of its employees during its annual appraisal. The reason it cited was ‘poor performance’.

The company that employed 10,000 employees in the United States, Infosys, is also in the same boat. The company is planning to let go of several engineers citing ‘poor performance’ as a reason. It could even let go of mid-to-senior level employees.

In a statement, Infosys said:

A continued low feedback on performance could lead to certain performance actions, including separation of an individual. Performance assessments are done with reference to the goals individuals have on business objectives and other strategic priorities.

What’s shocking is that in 2015-16, Infosys let go of more than 9,000 employees, but in the first nine months of the following financial year, they hired only 5,700 new people. While cutbacks are on, recruitment is slow too.

Cognizant's Blow to Its Engineers

In March, there was news that IT company Cognizant may lay off 6,000 employees. Some other reports suggested that this number could go up to 10,000. At least 75 percent of the company’s workforce is in India.

These lay offs in the country’s top IT companies is likely to have a direct impact on lakhs of IT engineers in India.

Buckling Under Automation and AI

There are technological revolutions taking place in this industry practically everyday. The use of automation and artificial intelligence is one of the key reasons for these layoffs.

Experts say even the entry level work no longer requires human effort – artificial intelligence can take care of it all.

Engineers who fail to update themselves with technology are becoming obsolete. In this case, the worst affected are perhaps the mid-level employees who have been working with the same software and technology for years. Stringent visa laws have also played their part to make matters worse.

in 2016, US-based research firm HFS claimed that in the next five years, 6.5 lakh people may lose their jobs in India’s IT sector.

IT Sector Was the Only Hope

Approximately eight lakh engineers graduate in India every year. Be it an electronic, electrical or a mechanical engineer, everyone turned to the IT sector due to lack of jobs. After a few short courses in language and coding, doors into software companies would open.

But from what we have seen, the trend seems to be changing only for the worse.

(This article was first published in QuintHindi.)