HYDERABAD: As the layoff buzz in the IT industry comes to a steady halt with the second quarter coming to an end, companies which are experiencing high attrition rate are now learnt to be on a cost optimisation spree to cut operational costs, including pay cuts for top-level executives and forcing senior-level employees to opt for voluntary separation programme (VSP). IT employees feel that such a move is just another means to lay off more employees in the coming days.
In a recent development, after announcing its second quarter results, Cognizant Technology Solutions, in an earnings call (telephonic conference with business analysts), said that 400 senior executives of the company had left their jobs after accepting a voluntary separation programme (VSP) that involved payment of a nine-month salary as a severance package.
Entrepreneurs and employees feel that such a move would only reduce the morale of the employees. “Tech majors usually keep buffer employees on board in order to assign any upcoming project but, with such a move, employees will feel insecure and their morale down,” said Kalyan Verma, co-founder of Smart Soft India Solutions, a software solutions company.
“We were a start-up and faced a lot of issues with employee management and I hope the same is the case with others,” he added. On the other hand, some techies feel that the company initiated a process which was required to weed out non-performers. “A situation like this took place in our company last year when about 150 employees quit under VSP. It is a simple situation to ease out the extra burden and then hire young talent,” said a senior official of Franklin Templeton International Services.
However, IT associations maintain that it is another form of layoff that is taking place in the industry. “It is performance issues with junior employees and VSP for senior executives. Both are layoffs in different processes. This is due to the capitalist mindset of the company that is bent on making only profits,” said Rajan Gandhi, vice-president, Forum for IT Professionals.