What is ailing India’s gilded IT sector?

Published: Wed, 08/02/2017 - 09:51 Updated: Mon, 08/07/2017 - 14:23

The IT BPES industry in India is haunted by the spectre of mass automation and layoffs. How are the employees coping? Not too well, as Hardnews finds out

It is a rare occurrence when a captain of industry has to publicly offer an apology for an act of indiscretion by a company employee. Yet, that is exactly what Anand Mahindra had to do when news broke that an employee of Tech Mahindra had been sacked in the most egregiously demeaning manner possible. The audio clip which surfaced is symbolical of the sheer Darwinian ethos that has become the norm in the IT industry circa 2017. For considerably long there has been a Damocles’ sword of layoffs hanging over employees in the industry. Many experts have wondered whether the actual bite can be as bad as the protracted bark. For as long as corporations have existed, human resources personnel have been the quintessential pantomime villains. But the sacking of the Tech Mahindra employee went beyond the pale of easily recognised corporate douchebaggery and callousness. Here was an employee, a family man, with bills to pay and children to send to school, who was being let go off in the same brutal inhumane manner that a butcher employs to slaughter livestock. The cruelty of the conversation sparked instant outrage among the lakhs of employees who keep the Indian IT industry from collapsing into a pile of rubble. Employees who work day and night to ensure that the Indian IT industry chugs along comfortably despite not innovating on any significant level; content to play the janitors of the computer revolution.

 

The Indian IT industry is going through a churn with automation, stricter visa rules in the US, Singapore and Australia, among other countries, coupled with the rapid pace of technology. This is one of the reasons for mass layoffs in the sector. There are many other reasons that are not so obvious from the get go. Indian IT companies are notoriously lax when it comes to paying severance packages. This attitude extends not just to junior-level employees but also to employees who have been in the industry for upwards of a decade. However, this egalitarian ruthlessness stops right outside the doors of the top dogs who shepherd Indian IT behemoths. There was much chatter in the Infosys grapevine when Rajiv Bhansal, the Chief Financial Officer of Infosys, was let go with a mind-boggling severance package. While the fat cats remain happy, the brunt of the mad dash for profitability in the absence of any re-skilling initiatives is borne by the likes of Srinivas Durgachalam. Durgachalam was a project manager in Wipro and served the company loyally for nearly 13 years. The beginning of 2017, however, brought a barrage of trouble for the software professional. Over the years, he had handled various important projects at the organisation. At the time the appraisal process began, he found out that his rating had been fixed by his bosses without any discussion with him. He was also astonished to find out that even though he had performed well and had been receiving a good rating for the past several years, his rating this year was abysmal. Prior to all this, he points to a string of meetings with his bosses where he drew their attention towards a number of loopholes in the projects being delivered to clients by Wipro. He was of the opinion that if the quality of services declines, clients are going to move away from the company. When he took up the issue of his appraisal rating with his seniors, he was asked to resign and look for another job. After having performed well, he was prepared to not go out without a proper explanation from his seniors as to why he was being asked to leave. “I had to give up one day. The pressure had been building up slowly. The human resource manager would come in every day and ask me if I had found another job. After a point, it became too much to take. I had to put in my papers,” says Durgachalam.

The software professional disagrees with the fact that automation can lead to mass layoffs. Durgachalam asserts that several processes have been automated under his watch but that only means that a particular job which took eight hours can now be done in five hours. “That means you have an excess of three hours in your hands that you can use to do some other task. It may lead to the removal of one or two people but I don’t see mass layoffs happening because of automation,” he says. Thinking of the time after he was forced to quit Wipro, Durgachalam says that he is still trying to deal with it—there are loans to be paid off and he has also developed high blood pressure. “There was a time when IT professionals were looked at with a lot of respect. Now I have a hard time explaining to people in my social circle what is going on in my professional life and despite having an experience of over two decades in the IT industry, I am being forced to compete against graduates,” Durgachalam says.

It is an inevitable fact of life that the people who are cast off in any corporate organisation are not necessarily the best employees but the ones who don’t make the effort to schmooze, network and grow their circle of influence inside the organisation. Those without godfathers will fall by the wayside, as Manish Pandey (name changed) inevitably did this year. Pandey, a senior project manager with Wipro, has been to the US three times for various projects over the last four years. In January this year, he was in the US when he got to know that he had been rated down by his senior for not performing well for the first time in the four years he had spent working with Wipro. Beginning January 26, his access to the company system was revoked by Wipro and he was taken off the project he had been working on without a proper explanation. In March, he was asked to come back to India. 

Over the next three months, he appeared in several internal interviews for other projects within Wipro and whenever he was selected by the interviewer, HR would intervene and stall his selection on the grounds that he had not been performing well. When he took the matter up with HR and his senior, he was told that he had not been spending the stipulated amount of time in office and that the number of working hours that he had been logging in was extremely poor. Pandey responded by saying that there were days when he worked well beyond the stipulated time period and even though he didn’t log the same number of hours every day, he often took his work home. “It’s more like a culture there… A tacit understanding at the senior level that when you have to, you will work for as many hours as need be. But at the same time, you can also choose to leave early on some days. I had never been told before that it was a problem. So, I did not understand what was wrong because everybody else was doing the same,” says Pandey. An inquiry was set up to ascertain if he had put in a satisfactory number of working hours. What the software professional finds the most baffling is the fact that the inquiry never took into account the two weeks during which he was on the bench in the US. “I did exactly what they are saying I am not supposed to do. From January 26 to February 10, I was at home and logged my working hours as time devoted to self-learning and improvement,” asks Pandey. According to an internal policy of Wipro, people who are working abroad need to be called back home as soon as they have stopped working on a project.

Slowly, pressure began to build on Pandey to quit willingly. When he refused to do so, the company handed him a termination letter. However, refusing to bow to their whims, Pandey is determined to drag them to court if need be. “I am a 47-year-old man. It is not easy to find a job at this age,” he says. He is not sure but says that around 6,000 people in Wipro had been forced to resign at the time he left. With Donald Trump winning the US presidential election, it became mandatory for companies to hire at least 50 percent Americans as employees. He says there is a lot of murk in the corporate culture and several underlying factors come into play when the management has to decide who should be spared and who should be shown the door. “I never had any Godfather inside the company. That is why I was asked to leave,” he says.

The reason for this excruciatingly painful set of mass layoffs has its roots in the fact that the Indian IT industry has made itself dispensable in more ways than one.

Even legacy companies that had a reputation for providing job security have been caught in the maelstrom of mass layoffs. For years, a handful of Indian information technology companies has become the go-to tech support proxies for US businesses. As a result of that booming demand, Wipro, Cognizant, Infosys, and Tata Consultancy Services, among others, went on a hiring binge to bring on the technically proficient workers needed to work phones and keyboards to support far-away customers. The spurt in hiring prompted the mushrooming of engineering colleges. However, with time the employment rate has dropped but the number of engineers being churned out is only rising. At least 1.2 million engineering graduates enter the market every year and therefore, it is no secret that there aren’t enough jobs to absorb the entire workforce. Amongst the aforementioned industry behemoths, Tata Consultancy Services had a reputation as an employer that provided little growth but long-term job security. The work culture was palatable to many employees who desired a certain level of work-life balance. 

Message boards across the internet have depicted the Tata cash cow as a staid place with little to no innovation. When market forces finally caught up to the company it was people like Arjun Vadivel (name changed) who caught the brunt of the blow. Vadivel, a project manager, started working with TCS 10 years ago, well aware of the fact that there were other IT companies that paid better. He says, “I always knew that TCS was never a paymaster. But I never thought of jumping the ship because it offered career stability and job security. I used to love the Tata brand, going to the extent of buying most of my household products manufactured by them, right from ACs to the salt they made. In October 2013, I started working with one of TCS’ most important clients, a leading pharmaceutical company. Within three months, I was elevated to project manager for production environment of the project. I was consistently given a rating of 4+ out of 5. I want to ask, does TCS promote underperformers to the post of project manager for clients who are critical to the company?” 

Vadivel had been on-site for the last two appraisals and even got a visa extension in July last year. He was awarded the Star of the Month award in September by TCS’ global HR head. However, he had to come back in December when his mother was unwell. “The client I worked for was so happy with my performance that he approved similar project manager positions for offshore. So, I returned and resumed the same role of taking care of the production environment of that business critical application,” Vadivel adds. 

Within days of resuming duties in India, Vadivel was unallocated without any notice or reason and was told to meet the HR. “I am the sole breadwinner of my family. My father passed away four years ago and my mother has been in depression ever since. I have a wife and a seven-year-old son who I don’t have the courage to face.” Vadivel’s case is perhaps the worst of the lot, caught between a rock and a hard place he now has to face an uncertain future with virtually no savings to fall back upon. 

 

Online audio distribution platform Soundcloud is full of harrowing first-person accounts of people who have instalments to pay, families to take care of and have lost their jobs. Pandey says that the industry is witnessing a massive termination spree but there is hardly anything on paper to prove that the IT industry is wrought with the crisis because most of the employees are being forced by their employers to quit. In an emailed response to Hardnews, TCS said that there had been no layoffs in the company since January this year. The process has been dubbed by industry experts as the standard, annual procedure to “trim the fat,” but the unofficial figures coming in from various sources are mind-boggling. A study by a leading financial daily pegged the total job losses in the seven major firms of the industry (Infosys, Wipro, Tech Mahindra, HCL Technologies, US-based Cognizant Technology Solutions and DXC Technology, and France-based Cap Gemini SA) at 56,000 this year. Wipro has shut its Lucknow and Mysore units. A report released by Naukri.com in May this year noted that while the job market continued to be volatile, the IT industry was the worst-hit with a 17 percent decline in hiring in May this year as compared to May 2016. Rajesh N, the spokesperson of the Bengaluru chapter of Forum for IT Employees (FITE), refuses to believe that the layoffs are part of the normal attrition process: “We have observed that job cuts are being done to increase the firm’s profit to reach the projected margins. The management is just trying to escape from the reality by putting the blame on automation or new policies by the US government.”

If you follow the chatter on the internet, you will find a number of distraught employees on forums like Quora asking strangers for advice on how to survive after being fired in the most callous way possible. The shake-up has left many people standing on the brink of the simmering cauldron; while some try to hold on, a few take the plunge. A techie in Pune recently committed suicide, blaming the lack of security in the IT sector. 

Ever since the IT companies started “trimming the fat,” FITE has started receiving at least 1,000 distress calls a month. Vadivel says that the financial challenges unleashed by the sacking is just the tip of the iceberg and he is not at all surprised that the 25-year-old techie in Pune killed himself because he was unable to cope. At the time people are fired, they are made to believe that they are underperformers who were given ample opportunities to improve themselves. After a point, it is only the employee’s words against the employer’s. Before anything else, the process damages the self-esteem of the worker and that, coupled with a host of money-related challenges and responsibilities, makes for a lethal combination. 

Even for those who have stayed behind, a sense of uncertainty prevails. However, one sees little efforts by IT professionals to organise themselves into a union and take on the management. S Kumar, a member of National Democratic Labour Front’s (NDLF) IT wing, says that there is a deliberate and sustained misinformation campaign by the companies in the IT sector that Indian labour laws are not applicable to them and therefore trade unions cannot be formed by employees. “Employees also did not go for unionisation due to the relatively higher salary, overseas opportunities and work in modern offices. Hence, there was no formal (or informal) collective bargaining. Compensation, promotions, increments are decided by an extremely arbitrary appraisal process,” notes Kumar. In 2015, NDLF approached the Madras High Court to clarify this issue. The court directed the Tamil Nadu government to take a decision and the government categorically stated that no such exemption was given to the IT sector. Pandey makes another pointed observation on the issue: “Even if you try to rise in rebellion against the management, it is risky in many ways. They are powerful people and if they choose to ostracise you, it is quite possible that you will not find a job anywhere in the industry. In this scenario, who will take the risk? People feel that it’s better to go out without making any noise. You have already lost a job but at least you have the option to get another one. You have not been blacklisted by your employers.”

Things will get worse as Artificial Intelligence (AI) and automation kick into high gear. The IT industry has already seen big reductions in headcount over the last 15 years. Just as the sector was not prepared to do re-skilling when automation picked up momentum, it is not prepared to absorb AI into its space with minimal damage. In this sense, AI’s advent is just the continuation of a process of automation that is already well underway. 

Pics Credit: Uni, Newspaper screenshot (DC, TOI) 

Shalini Sharma is a graduate from Xaviers Institute of Communication Bombay, with over three years of journalisti experience. She reports on politics, agriculture, international relations, adivasis, human rights and other issues

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This story is from print issue of HardNews