Woes of IT majors continue, more layoffs likely in companies

While Capgemini’s reason is reportedly business slowing down, Infosys said that it was involuntary attrition.

Money IT

The woes of the Information Technology sector in India continues, as more potential layoffs at IT majors was reported on Tuesday. After Cognizant said that that it will restructure the company and layoff around 7,000 employees, reports stated that Capgemini laid off nearly 500 employees.

While Capgemini’s reason is reportedly business slowing down, Infosys said that it was involuntary attrition.

Meanwhile, reports also suggested that Infosys is reportedly laying off employees across different levels — 2,200 people who are at the level of senior managers, 4,000-10,000 people at the associate and middle levels, and 50 senior executives.

"As a high performance organisation, involuntary attrition is integral to normal course of business and this (sacking) should not be interpreted as any mass trimming across any level in particular," Infosys told IANS.

The company, however, did not disclose how many employees were fired in the recent past.

Involuntary attrition, a term used by the companies for firing or sacking employees for not measuring up to its expectations or high standards of performance, has been taking place at the company over a few quarters.

"This is not laying off, if you don't perform for two years or two quarters or whatever then you are asked to go, it's a performance-related thing," the source told IANS.

Earlier, Infosys announced that its attrition rate annualised consolidated attrition rate stood at 21.7% as on 30 September 2019 as against 23.4% on 30 June 2019 and 22.2% on 30 September 2018. The attrition rate of 23.4% was reportedly one of Infosys’s highest.

However, in the case of Capgemini, Times of India reported that the MNC allows them to be on the bench for 90 days, following which the company moves them to a corporate pool to find projects. Those who couldn’t find projects are the ones who have been laid off, the report stated.

News regarding job losses at Infosys and Capgemini come barely one week after another IT major, Cognizant announced that the would be laying off 5,000-7,000 people in the upcoming quarters. Cognizant Technology Solutions (CTS) plans to remove 10,000 to 12,000 mid-to-senior level associates from their current roles, and reskill about 5,000 of them. This was announced by Brian Humphries, CEO of Cognizant in its earning call with analysts.

Furthermore, jobs in the telecom sector are also at risk, as Economic Times reported that 1,00,000 people could lose their jobs due to unpaid dues from BSNL to the tune of Rs 20,000 crore.

(Editor's note: The article had erroneously said CapGemini is laying off 5,000 people, instead of 500.)