Chennai-based Union of IT/ITeS Employees (UNITE) has condemned the proposed layoff of 7,000 employees by US-based IT major Cognizant and has called for unionisation of tech workers.

Cognizant in its earnings call said that the company is looking at a net reduction of 7,000 employees at the mid-to-senior level to pare down cost. As it exits the content moderation business, another 6,000 employees are also likely to be affected.

This move is likely affect the Indian market the most, given that most of its workforce is based in India.

In a statement, UNITE said Cognizant has announced layoffs despite the fact that the firm has reported strong earnings for the quarter-ended September. “UNITE sees this proposed act of mass retrenchment of its employees, despite a strong quarter result, as a motive for profit-maximization, ignoring the lives of its employees and their families,” the statement said.

For the third-quarter ended September, Cognizant registered a revenue of $4.25 billion, up 4.2 percent from the comparable quarter last year. Its net profit stood at $497 million compared to $477 million in the comparable quarter last year. Operating margin stood at 17.3 percent compared to 18.5 percent in the year ago quarter.

The management said it expects an annual revenue savings of $500-550 million as it continues to reduce manpower cost at the senior level and also exit from business that are not in line with its strategy such as content moderation.

There have also been reports that employees, who were unable to upskill and are on the bench for a long time, are likely to be laid off.

It is in this context that Alagunambi Welkin, General Secretary, UNITE, called for unionisation similar to that initiated by workers of HCL America to fight for their rights.

In a first, close to 80 techies from HCL America joined a United Steelworkers (USW) union in the US in late September to demand better working conditions and other employee benefits.

Welkin said Indian workers who were working in the content moderation business too were under similar stress and need to be protected. “With the implementation of artificial intelligence/machine learning as part of World Economic Forum's Fourth Industrial Revolution vision, where the low-end IT and ITeS jobs are getting automated, it is the need of the hour to unite and protect jobs through collective bargaining,” he added.

“UNITE invites the Cognizant Technology Solutions employees to join UNITE and practice trade unionism to win their rights,” the statement added.