THIRUVANANTHAPURAM: Experts say companies are laying off employees in view of possible slowdown in the global economy.‘Cost of talent soared due to insane hiring during pandemic; this is a correction of that costly mistake’
With the war in Ukraine threatening to push the world into another recession, IT services majors, including Infosys and Wipro, have turned cautious on freshers -- by initiating larger-than-usual layoffs, lowering salary packages and even delaying joining dates. This is after they went berserk on recruitment, in anticipation of the post-lockdown period offering a boost in business, say experts.
Earlier this year, Infosys had reportedly sacked around 600 trainees. The latest round of layoffs involves recruits who allegedly failed to clear the internal fresher assessment. The company has not yet issued an official statement on the number of trainees impacted, say sources. However, according to a company spokesperson, this is a common exercise. Many candidates are still awaiting offer letters. Freshers are concerned that this could create a gap in their resumes, affecting their future career prospects.
Wipro, on the other hand, has revised many new recruits’ annual salary package to Rs 3.5 lakh from the earlier offered Rs 6.5 lakh. However, amid the speculation, Tata Consultancy Services (TCS) has made it clear that it will not sack any employees.
“I was selected by Infosys through campus placement. It is well known that the company conducts internal assessment after training and sacks non-performers. But the number this year has been very high. Now, many of us are in a sticky situation as we need to search for jobs, and our one year has been wasted,” said Arjun (name changed), a native of Kottayam, who had undergone training at the firm’s Mysuru centre.
Experts say companies have started laying off employees in view of a possible slowdown in the global economy. “Because of the conflict in Ukraine, projects in the United States and Europe have been kept on hold. The recession hasn’t affected IT companies in India. But some firms, which had carried out mass recruitment earlier, have fired employees. Many have tightened the recruitment process. However, firing after internal evaluation is common at Infosys and many other companies,” said Sreekumar V, secretary of GTech (Group of Technology Companies) and centre head of Tata Elxsi.
According to Robin Alex Panicker, chief product officer at Finotes, the cost of talent has gone up, which is not at all sustainable for smaller IT companies. “When we look at the global scenario, it’s clear that the cost of talent has jumped to unreasonable levels in the last couple of years. That kind of cost increase is not sustainable for businesses. This was the outcome of the insane hiring done by companies during this period. What we see now is a correction of that costly mistake, and this correction is triggered by the recessionary pressure created by various factors, including the war,” he added.