IT Mass Lay-offs: Unions Barred From Govt Discussions With IT Firms

Amidst flurry of news surfacing in the media about ‘mass lay-offs’ in the Indian IT sector, the Tamil Nadu Labour Department on Monday convened a meeting with the representatives of the IT firms and National Association of Software and Services Companies (NASSCOM). The meeting was called following a memorandum submitted by the employees’ union calling the retrenchments “illegal”.

However, the representatives of the employees’ union were barred from attending the talks, as the labour commissioner reportedly said that there was no need for the government to call unions.

Alagunambi Welkin, general secretary of Union of IT & ITES Employees (UNITE), while speaking to NewsClick, called it a “continuation of the ‘closed-door meeting’ tradition” followed within the IT industry where the labour-related matters are not discussed with the union, even when they are the ones who represent the “affected party”.

Two employees’ unions—UNITE and All India Forum for IT/ITES Employees (AIFITE)—wrote to the Tamil Nadu’s labour commissioner on November 5 seeking government’s intervention in preventing loss of jobs. The letter was sent in the backdrop of major IT firms announcing retrenchment of thousands of workers.

US-based Cognizant, which is also the second largest IT employer in the nation, reportedly was to lay off as many as 7,000 employees over the next few quarters and another 6,000 employees on account of exiting the content moderation business for social media behemoths such as Facebook. Infosys, an Indian multinational company, was to cut 10% of its employee strength at different levels – 2,200 at senior manager level and around 4,000 to 10,000 at the associate and middle level. In addition to this, the French IT firm Capgemini laid off nearly 500 employees.

The news of ‘mass retrenchments’ panicked the entire IT workforce. Though, at the outset, it can said that the IT employees are now about to feel the heat of the current slowdown, Welkin doesn’t see any correlation between the lay-offs to the ongoing crisis in the Indian economy. He describes the mass retrenchments as “profit maximisation” schemes of the IT firms.

“Under the name of rationalisation of the workforce, the mid to senior level employees are retrenched. They are then replaced by freshers who bring similar skills with them; however, are paid less, which is according to estimates, only a quarter of what the former would be getting,” he said.

This allows the IT firms to cut the labour cost without affecting the work productivity, he added. Another way, according to him, in which these retrenchments can be read is as a response of the IT firms to the unionisation of its workforce that observed a spike with in IT firms, for the first time in India, in the recent past.

Among the army of employees that were laid off by Cognizant, one was also a unionist—Elavarasan Raja. While the Forum for IT Employees (FITE), in which Raja holds the position of general secretary, claims that he was terminated for his involvement in the union activities, Cognizant has denied this stand.

“Though this can’t be seen as a trend within the industry, we definitely view it as the firms putting out a statement against the employees’ fronts who fight for the rights of the IT workers,” Welkin said.

The meeting, which was called on Monday, was attended by representatives of leading IT corporates, namely, Infosys, Cognizant, IBM, Accenture among others.

To establish ‘mass lay-off’, the Labour Department has asked the companies to submit a report on difference in number of employees from last year to this year, reported The New Indian Express.

“Such a report will be an eyewash,” Welkin said, “while reporting that the total number of employees has not decreased it will only cover-up the retrenchments that are taking place in thousands with in the IT firms.”