THIRUVANANTHAPURAM: Recessionary fears have finally reached Kerala’s shores. As an uncertain global economy forces technology companies to get leaner, ripples are being felt in the state, where nearly 220 employees at Technopark in Thiruvananthapuram have been laid off and another 250 have been told to relocate or resign.
McKinsey & Company will close down its operations in the state by month end, and the consulting giant has asked its employees to relocate or resign. The move has mostly affected mid-level and highly-paid employees.
According to an affected employee at McKinsey, “Our employee headcount is 250, and many of us are in the age group of 30 to 35 with families. We cannot accept the offer of relocating to another state. As a result, we have no other option left but to start searching for other jobs.”
Conscience Business Solutions Private Limited and Accubits Technologies Inc, which are functioning at the Yamuna building of Technopark Phase III, have reduced employee numbers to rein in costs in anticipation of a global economic downturn.
Suresh Nair, CEO of Conscience, said the company had to lay off more than 50 employees because a major project they were working on was cancelled midway.
“We had a three-year agreement contract with the US company Nuance, for which we had hired 150 employees on contract. However, when Nuance was acquired by Microsoft, the project was given to Cognizant Technology Solutions (CTS), causing us a loss of `3.5 crore. Regrettably, we had to lay off some employees, but we also managed to place many of them with CTS,” Suresh said.
Aharsh M S, chief marketing officer at Accubits, said the company had to let go of 170 employees last month due to the current downtrend in the blockchain market.
Layoffs a prelude to impending recession?
“Unfortunately, the blockchain market has taken a hit with the recent collapse of banks in the US, leading to a decline in new investments and funding. To safeguard our business, we had to make the difficult decision to lay off our employees. However, we are committed to supporting them in finding new job opportunities,” Aharsh said.
The move by the companies is believed to be a prelude to the impending recession that could affect the IT services sector in the country. Prathidwani, the organisation for the welfare of IT employees at Technopark, has intervened in the matter and is helping affected employees find new jobs through online job portals and seeking compensation from the companies through the labour department.
Vineeth Chandran, secretary of Prathidwani, said, “We are currently verifying the details of the reported layoffs from the companies. Specifically for McKinsey, 250 employees were asked to relocate or resign as the company’s operations are winding up.”
V Sreekumar, secretary of GTech (Group of Technology Companies), said that GTech has initiated informal discussions with companies that are laying off their employees. “We have heard about the McKinsey issue but are yet to get clarity on the matter. We will extend our support to employees who are being terminated. However, if the layoffs are due to internal performance-related issues, we cannot intervene,” Sreekumar said. When contacted, McKinsey & Company refused to comment on the issue.
ASSN INTERVENES
Prathidwani, organisation for the welfare of IT staff at Technopark, has intervened in the matter and is helping affected employees find new jobs through online job portals and seeking compensation from the companies