TCS planning more layoffs, Wipro sacks 1000, Satyam to axe 4,500 ... It seems the days of pink slips have come to haunt Indian IT pros. Though all companies have termed these terminations performance-based, it is anyone's guess that global slowdown has started hurting Indian IT cos.
Seems the ugliest face of slowdown -- pink slips -- is back at Indian IT cos. After Wipro sacking thousand and putting another 3,000 under scanner, came the reports of the country’s no. 1 IT exporter TCS planning another round of layoffs.
The fourth largest IT services exporter Satyam too is reported to be giving pink slips to as many as 4500 of its employees.
Incidentally, all companies have termed the job cuts as purely performance-based. Said a Satyam spokesperson, "The bottom 5 per cent of those who have got a bad appraisal are put under PIP (performance improvement plan) and given dummy projects to prove themselves. If they fail they will be shown the door. But some of them marked for PIP said they have been given very little time to come up as winners."
However, even as it downsizes, Satyam continues to hire new employees in thousands. Over 40 per cent of them are fresh blood just passing out of college.
Are pink slips really based on employee performance or are they a result of a tough economy. Are pink slips really a belt tightening measure from IT companies facing sagging bottomlines due to global economic turmoil?
The HR department of other IT companies too sings a similar tune. Lets we here their tune....
Late last year, the global IT giant IBM had reportedly laid off 700 entry-level trainee programmers (ELTPs) across its offices in India. Zensar too had reportedly given pink slips to 2 per cent of it staff, again the company claimed that it was on performance basis. The increments and salaries too have been a causality at most IT firms. Here's looking into the companies who have taken the manpower call.
After delayed appraisals and cut in payout's, India's fourth largest IT service provider, Satyam Computer is reported to downsize its workforce by a whopping 4,500 employees. This translates to a little less than 9 per cent of the 51,000 employees that the company employs.
Company sources reveal that 1,500 employees have been put under the performance improvement plan (PIP), euphemism for employees put on watch list and asked to shape up or ship out. Apart from this, 3,000 others have not been given any increment in the last appraisal cycle, thereby indicating that their services are dispensable.
Last Friday, company’s chief Ramalinga Raju had sent out an email to all employees warning them, especially the ones on the bench, to not bunk office and be in their best dress code, failing which they may face strict disciplinary action.
The company is reported to have handed pink slips to about 400 engineers and associates in Hyderabad, Pune and Visakhapatnam centers. The company management reportedly asked some of the employees to move out of its rolls to a contractual agreement or leave.
Like its peers, Satyam too claims that the layoffs are a part of its appraisal system. Global head, human resources, SV Krishnan says, "Our experience has shown that around half of them exit the system either voluntarily or involuntarily. We have concluded our appraisal process some weeks back, and we believe we are witnessing similar trends like those in the past."
There were also reports that the company has deferred the joining date of 7500 graduates it had recruited from various college campuses this year. However, the company said that it has no intension of withdrawing these offers. Interestingly, the company has recently announced plans to hire 15000 this year.
According to a recent report Asia's largest software exporter, Tata Consultancy Services is gearing up to another round of layoffs. The company also plans to discourage employees from staying on bench for more than two months on any of its centers.
Incidentally, the company had also fired close to 500 employees, citing poor performance after its annual appraisal. It was also among the very first companies to announce a cut in the employee variable pay across the board. The company which sees some project delays this quarter, but no cancellations, terms this as an employee utilization exercise. The process will involve counseling employees and training them. Employees would be asked to undertake projects on which they have never worked on and will have to update their skills.
Recently, TCS also retrenched 15 employees from its Australian subsidiary. Interestingly, last month too, the company had shown door to some 25 employees from its Kolkata and Bangalore centers for fudging CV's. By June-end, the total employee strength TCS stood at 116,300, across 64 countries. The company hired 8,982 employees in the first quarter.
The bad news has come from India's third largest IT outsourcer, Wipro Technologies too. The company has already laid off 1,000 employees, and another 2,000 employees have been put on scanner.
The company is reviewing the performance of 60,000 global IT services employees from the senior leadership team down to the person with one-year experience.
Terming it as a regular exercise, company's corporate vice-president (human resources) Pratik Kumar said, "As the appraisal cycle gets over, a multi-layer review happens. Following that, people who have fallen in the lower quadrants of performance are put on watch. Some are asked to pull up and others are asked to move on."
He added that, "We took a closer look at our hiring and realized that we did not need to hire more, since there were people on the bench." Many employees are being given counseling to improve their performance, others may be asked to leave.
At the end of the quarter ended June 2008, Wipro’s IT services employee base had fallen to 61,345 from 62,070 employees at the end of the previous quarter.
In July, Mumbai-based Patni Computer Systems too gave pink slips to 400 employees on grounds of non-performance.
Terming it as a routine exercise and not a slowdown setback, country's sixth-largest exporter said that it is an effort to weed out non-performers.
Rajesh Padmanabhan, vice-president and head, global HR, Patni, said, "This is an absolutely regular appraisal that is important for any performance-driven organisation. It is something standard we do every year. Employees who have got 0-1 rating on a scale of 5 typically form the basis for the first-level shortlist. These are performance-based resignations; we've not issued any termination letters.”
However, industry sources reveal that the laid off employees included several project managers as well. Incidentally, while in case of TCS, the retrenched number was about 0.5 per cent of the workforce, for Patni, it made for closer to 3 per cent of the 14,800-strong workforce.
Narendra K Patni, Chairman and CEO, Patni Computer Systems said, "The overall market environment remains challenging with prevailing global uncertainties. We are cautious in our short-term outlook but remain positive on long-term prospects and are continuing our investments in identified areas."
Are pink slips really a belt tightening measure from IT companies facing sagging bottomlines due to global economic turmoil?
