Layoff Spree: Tech Mahindra Too To Weed Out Hundreds Of Employees 

New Delhi: In a series of lay-offs across the IT sector thanks to the new visa policies of the POTUS Donald Trump, another giant Tech Mahindra is going to hand out pink slips to nearly 2,000 employees this month.

Claiming to "weed out bottom performers", Tech Mahindra, which ranks fifth among the top Indian IT firms by revenues, has begun its annual performance appraisal process.

After Infosys and Wipro, the Mumbai-based company to weed out at least 1,500-2,000 employees.

At the end of December 2016, the company had over 1.17 lakh employees. Tech Mahindra’s larger rivals, Wipro, Infosys and Cognizant have already initiated similar performance reviews and estimates suggest that thousands of employees in the sector could be shown the door over the next few weeks.

The development comes at a time when Indian IT firms are facing challenges in the business environment and stricter work permit regime in countries like the US, Singapore, Australia and New Zealand. While the companies have termed these layoffs as part of normal business decisions, many believe these are directed more towards controlling costs.

Last week, the US-based Cognizant had rolled out a voluntary separation programme for directors, associate VPs and senior VPs, offering them 6-9 months of salary. Wipro, too, is learnt to have asked about 600 employees to leave as part of its annual “performance appraisal” even as speculations were that the number could go as high as 2,000.

With the US hardening its stance on outsourcing, IT firms are under pressure to hire locals instead of taking Indian employees on work visas to client sites. This also impacts their margins. Infosys, for instance, has said it will hire 10,000 people in the US over the next two years. It is also looking at setting up four new innovation centres there. IT companies have been one of the largest recruiters in the country. Apart from the impact of stringent visa regime, increasing automation of processes would also lead to reduction in hiring in coming years.

Cognizant Offers Top Executives 6-9 Months’ Salary For Voluntary Exit

IT services firm Cognizant Technology Solutions Corp. is extending a “voluntary separation incentive”, offering up to nine months of salary, to some of its top-level executives.

The US-based firm, which has a large part of its 2.6 lakh-strong workforce in India, has written to top executives in director and senior vice-president roles. The company has given the top-rung executives an option to exit the organisation by accepting either six (for senior VPs) or nine (for directors) months’ salary as severance pay. “This voluntary initiative is being communicated to management-level associates—from director-level to senior vice-president—and eligibility is at the discretion of Cognizant leadership,” a Cognizant spokesperson said.

Meanwhile, a forum of software professionals has appealed to the Tamil Nadu and Telangana governments to take action against Cognizant for allegedly illegally terminating its employees.

Like all the other firms, Cognizant, too, denied any layoffs and said the workers were asked to leave for performing unsatisfactorily. “Each year, as is the best practice across our industry, we conduct performance review to ensure we have the right employee skill sets necessary to meet client needs and achieve our business goals,” the company said. “This process results in changes, including some employees transitioning out of the company. Any actions as a result of this process are performance-based and generally consistent with those we’ve made in previous years.”