Layoff fears back to haunt IT industry

Anjali Prayag Bangalore | Updated on November 12, 2017 Published on August 12, 2011

Hiring activity in the IT and ITeS sectors has slowed down

With the US economy downgraded, jitters are back for the Indian IT and ITeS jobs market. While the numbers are not yet intimidating, there is a fear of impending large-scale layoffs across the industry.

For instance, Cisco, which has announced a global workforce reduction of 6,500, is said to be in the process of cutting its staff numbers in India by at least 300, according to a source in the company. IBM India is said to have started a layoff process that will affect at least 1,000 people.

In response to an e-mail on the layoff issue, Cisco India said all functions and geographic regions have been impacted, “but we are not disclosing specific regional impact.” IBM India did not respond to a similar query.

Cisco clarified that it reduced its global workforce by approximately 6,500 employees and that this includes some 2,100 who elected to participate in a voluntary early retirement programme. This amounts to a headcount reduction of close to 9 nine per cent of its regular full-time workforce.

A Cisco spokesperson said this action has been guided by ‘a considered approach to focus our workforce in support of the company's priority areas, retaining the capabilities and talents to effectively support our long-term strategy.'

Sources in IBM India said right now, it is the bottom of the employment pyramid that will be impacted, but do not rule out senior people also being asked to leave. Earlier this month, HSBC Bank announced that it would cut 10,000 jobs. Although HR experts say at least five per cent would be from India, the company spokesperson clarified that the ‘announcement would have no impact on India.'

Rationalising workforce

Ms Nirupama V.G., Managing Director of hiring firm Ad Astra Consultants, however, sees all large companies rationalising their workforce strength. “This time it is going to be tougher than before, because the economic cycles are getting shorter.” She says the bench strength will be tightened and just-in-time hiring will be the order of the day.

That all companies are reining-in their hiring process is clear from the recent index put out by job portal, “As the hiring activity for the IT and ITeS sectors has seen some slackening this month, all the IT hubs have been affected,” according to the company. Hiring activity in the IT and ITeS sectors slowed as the monthly job index dipped by 10 per cent and 17 per cent respectively in July 2011 compared with the previous month.

Published on August 12, 2011
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