Senior IT executives in India face shut down time as companies look for substantial savings

Five of India’s largest IT employers have recorded a cumulative 1,821 jobs lost in just the first three months of 2017-18.

Illustration for Representational Purposes. | Express Photo Service

CHENNAI: On Sunday, news broke that IT firm Cognizant had pared its global workforce of 400 senior executives — in relatively high positions — through a voluntary separation scheme. It is estimated that a significant number of these jobs were based in India, where more than one-third of the firm’s 2.5 lakh employees work.

News of IT firms trimming workforce might have become common, but the seniority of jobs rendered redundant (with average salaries above Rs 6 lakh per month) should underline the ongoing crisis. So should the fact that companies stand to make substantial savings by tightening headcount and increasing automation — a rationale supported by Cognizant’s chief financial officer Katie McLoughlin during a recent investors’ call.

“While the firm would incur realignment charges of $39 million (of which $35 million is for those who accepted the offer), the scheme would result in approximately $60 million of annualised savings,” she had said.

Lucrative potential savings like these have pushed firms wading through a slow-growth market to focus on increasing “employee productivity” and “average revenue per employee”.

Infosys’ CEO Vishal Sikka, for example, has repeatedly stressed both. In April, Sikka declared that automation and artificial intelligence have to be brought in to improve productivity. He also announced the company had freed up effort worth 11,000 employees through automation and those members would re-skilled.

Similarly, Mcloughlin pointed out that CTS had made “good headway” last quarter by driving utilisation rates higher, “slowing the pace of hiring and improving resource alignment” to re-skilling and multi-skilling programmes. But, can everyone be reskilled?

Nasscom’s president R Chandrasekhar said in July that if employees don’t reskill despite being given a chance, firms “would have no choice…”

No surprise then that the end of the first quarter of this financial year has seen IT giants like TCS, Infosys and Tech Mahindra record lower headcounts for the first time in years. Five of India’s largest IT employers have recorded a cumulative 1,821 jobs lost in just the first three months of 2017-18.