Silent Layoffs Grip Indian IT Sector, Impact Over 20,000 Employees

The Indian IT sector, a crucial pillar of the country’s economy, is witnessing a silent yet significant wave of layoffs. According to data shared by the All India IT & ITeS Employees' Union (AIITEU), around 20,000 tech professionals lost their jobs in these 'silent' layoffs throughout 2023. This article delves into the phenomenon, its impact, and the underlying reasons.

 

Personal Stories Amid Silent Layoffs

Aakash, a 31-year-old IT professional, recounts the day in late 2023 when he received an email from his manager and an HR executive at Teradata, a cloud analytics and data platform firm, asking him to join a virtual meeting. During the brief 15-20 minute call, he was given two options: either accept termination with a lower payout or resign voluntarily and receive four months of salary.

 

“When I asked if I could get some time to decide, they said I had to inform them during the meeting itself. I quickly spoke to my cousin and decided to opt for the resignation,” Aakash told Moneycontrol.

 

Since then, Aakash has appeared for 20-25 interviews but has struggled to secure a new job. His severance pay is dwindling, and he now relies partly on his parents for support.

 

Similarly, Sriram and some colleagues at Cognizant faced a similar fate after their client decided not to renew a contract. Despite efforts to find new projects for them, Sriram was ultimately asked to resign, receiving three months of salary as severance pay.

 

These stories are just two among thousands of IT services employees who have been quietly let go amidst a challenging demand environment for the industry.

 

The Phenomenon of Silent Layoffs

Silent layoffs are a discreet method employed by companies to reduce their workforce without drawing much attention. Employees are typically given 30 days to find a new role within the same company. If unsuccessful, they are asked to resign. This practice has affected employees across various experience levels and companies.

 

Impact on Employees

According to Harpreet Singh Saluja, president of the Nascent Information Technology Employees Senate (NITES), the stigma associated with termination can severely impact an individual’s ability to find new employment. Employees often sign non-disclosure agreements (NDAs) to receive their full payout, further silencing their voices. Moreover, existing employees are now working longer hours, with workloads increasing from 10-12 hours to 14-16 hours per day, as companies aim to downsize and improve profit margins.

 

Companies Involved

Silent layoffs are not confined to small or medium-sized companies. Large firms such as Teradata, Cognizant, Accenture, Infosys, and State Street have also engaged in this practice.

 

Teradata: Laid off about 35-40 employees from its Hyderabad campus at the end of last year.

State Street: Let go of around 400-500 employees in India in March 2024 as part of a streamlining effort.

Infosys: Despite official denials, multiple sources indicate that the company laid off nearly 200-500 employees across its campuses in 2024.

 

Industry-Wide Impact

The trend of silent layoffs is not limited to individual companies but reflects a broader industry-wide pattern. The top five Indian IT services companies—Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, and Tech Mahindra—together lost around 69,167 employees in FY24 due to uncertain demand, delays in deal ramp-ups, and cancellations. For some, like TCS and Infosys, the full-year headcount decline was the first in two decades.

 

Macro-Economic Factors

Yugal Joshi, leader of technology services research at Everest Group, attributes these layoffs to challenging macroeconomic scenarios, which are forcing companies to reduce operating margins. Many IT services firms are also trimming their smaller-sized clients, leading to further job losses.

 

The silent layoffs in the Indian IT sector represent a significant and troubling trend. With around 20,000 employees impacted in 2023 alone, the industry is facing one of its most challenging periods since the financial crisis of 2007-2008.

 

While companies strive to maintain profitability and adapt to changing market conditions, the human cost of these silent layoffs is immense. As the sector continues to evolve, it is crucial for both employers and policymakers to address the needs and welfare of the workforce to ensure a sustainable and equitable future for the industry.