The carnage at IT companies is not stopping. Companies like Infosys, Wipro, Tech Mahindra Ltd, HCL Technologies and Cognizant Technology are going to fire around 56,000 employees altogether. Most of the employees who are being handed pink slips are engineers. This is twice the number of employees fired last year.
The seven companies—Infosys Ltd, Wipro Ltd, Tech Mahindra Ltd, HCL Technologies Ltd, US-based Cognizant Technology Solutions Corp. and DXC Technology Co., and France-based Cap Gemini SA—and which together employ 1.24 million people, plan to let go of 4.5% of their workforce in 2017.
The numbers were collated by livemint.com after extensive interviews with 22 current and former employees across these seven companies.
A high number of employees have already been put on notice period by their respective companies.
Cognizant has placed more than 15,000 employees in the lowest category (bucket IV), and Infosys has placed more than 3,000 senior managers in the category of employees needing improvement.
DXC Technology has already revealed its plan to reduce its number of offices from 56 to 26 this year. The company plans to ask 5.9%, or 10,000, of its 170,000 employees to leave this year.
“Performance appraisal may also lead to the separation of some employees from the company and these numbers vary from year to year,” said a Wipro spokesperson.
“We continue to implement strategies to meet the changing demands of business in the current global economic environment. As a performance driven organisation, we assess employee performance on a regular basis and take necessary actions wherever necessary,” said a spokesperson for Tech Mahindra.
As IT companies start working on newer technologies such as cloud computing, they are fast moving from a people-led model, which means they need fewer employees. Meanwhile, many of the IT companies have embraced automation tools to perform the mundane, repeatable tasks that were performed by an army of engineers earlier.
Poor growth and pressure on profitability has prompted most companies to save on costs.
Infosys has declared already that they plan to hire 10,000 US citizens over the next two years. Wipro has hired over 2,800 Americans over the last 18 months and expects half of its total workforce in the US to be locals by the end of June 2017.
Cognizant, Capgemini, Wipro and Tech Mahindra started letting go of employees in February while Infosys, HCL, and DXC are expected to do so later this month. Most employees being asked to leave are engineers with at least six-eight years’ experience.