THE FIRING IN IT INDUSTRY – TRUMP IS JUST A PRETEXT

about 7 years ago
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By Ruma Dubey

Trump is the best pretext the IT industry was looking for.

That’s what most in the IT industry say. The way news is coming out about layoffs, with big companies like Infosys and Wipro stated to fire some 58,000 employees. Then there is the report by the Head Hunters, who say that 2 lakh employees in the IT sector will be laid off every year, for the next three years. Cognizant plans to reduce the work force by 2-5%. Tech Mahindra, HCL, Cap Gemini and DXC Technologies, employ a total of 1.24 million people and they have plans to fire 4.5% of its workforce in 2017. Those in the industry say that firing is unprecedented, on a much larger scale than what we say during the meltdown in 2008-09. Infosys which gives salary hikes usually in April, has deferred it to July. It says that it has not planned any layoff but will follow the usual performance based-exit path.

TCS, on the other hand, whose name has not figured out in this “firing” list says that it plans to hire and not fire.

So what exactly is happening? Many friends and their peers have come back saying that they have been handed out the pink slip after constantly getting good ratings for their performance. Suddenly, the very same employees who were doing well, with years of experience are being asked to go on grounds of falling or poor performance.

Those on the outside think that this is a “Trump” effect. With the restrictions on H1-B visas put by the USA, countries like Singapore, New Zealand and Australia also tightening their immigration laws, the feeling is that this firing is in response to that.

To some extent yes but this is not the whole truth. The real reason is that companies are struggling to scale up, there are very few new orders coming in while costs are going up. Thus taking this opportunity, IT companies are weeding out all employees who may not have the necessary set of skills to move towards digitization. The current firing that we are hearing about is more about cutting costs – it is as simple as that!

The bitter truth is that Indian IT companies simply did not have the vision to look into the future. Artificial intelligence, Internet of Things, digitization – these are the platforms on which all work is now happening and we were slow to realise this. Companies are now moving towards these new changes but these are monumental changes and require some dramatic shift in the way in which it works. Even for a behemoth like IBM, which was slow to change, it is Watson which has made it relevant today. We moved from Y2K to engineering services to BPO but currently we do not have a new product at hand – nothing which will be competitively priced and earn it the moolah. We simply did not bother to innovate, concentrating only on costs, missing out on the new bus completely.

Robotics and automation are the new buzzwords but very few have the skill sets. Today, engineers who were aspiring to go abroad might never see their dream come true and that means most will either continue to stay back or get fired. But in the midst of all this, the new graduates are in the biggest pickle as hiring them will become tougher.

There is no doubt that the Indian IT sector is going through a flux. The companies are going through a dramatic shift, almost like the earthquake which created the seven continents. Trump is just a pretext and probably the best thing to have happened to the Indian IT employees working in USA. But there is no doubt, it is going to be tough and sometimes even scary times as the cascading effect of the IT industry flux will percolate down to the other sectors too!

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