Wipro's move to sack around 500 of its employees as part of its appraisal process is indicative of the churn in India's information technology (IT) sector — which is moving towards increasing automation, use of artificial intelligence and is beset by tightening visa regulations.
The company is reported to have weeded out "non-performers" after a "rigorous performance appraisal". However, what happened at Wipro is not an outlier, other IT majors like Cognizant, Infosys and Capgemini are also facing their own share of challenges, and moving to either prune or re-skill their respective workforce.
The real bloodbath could be at Cognizant
US-listed IT major Cognizant Technology Solutions, which has a significant workforce in India, is said to be reducing its employee count by as much as five per cent, which translates to close to 10,000 workers, as reported in March this year.
Globally, the company employs around 260,000 employees, of this around 75 per cent of the workforce is based in India.
Here too, according to what the company spokesperson told Business Standard, the layoffs will take place as part of the Cognizant's performance review process. Typically, the bottom one per cent of the workforce is weeded out for non-performance, a common practice across IT firms as part of the annual appraisal exercise. The appraisal process generally ends by March.
This year, the appraisal cycles come in the backdrop of a recent report by advisory firm McKinsey & Company, which said that almost half of India's 3,700,000-strong IT services workforce will be "irrelevant" over the next three-four years. In fact, industry body Nasscom has also said that both freshers and existing employees should look at self-learning to stay relevant at a time when digitisation is causing disruption in the industry.
Infosys cuts back on fresh hiring
It is not just the layoffs, fresh hirings have taken a hit too. India’s second largest software exporter, Infosys, said it has reduced its hiring by as much as 60 per cent as it deployed more automation to do repetitive tasks being done by engineers. Infosys added 6,320 people in 2016-17, as against 17,857 in the previous year.
In fact, in February, Infosys Chief Executive Officer Vishal Sikka said, quoting a research report, that India would see the biggest impact on jobs due to automation (Read more). However, the more telling remark came from Infosys Chief Operating Officer Pravin Rao, who recently said that today even 15-20 years of experience may not prove to be the only credential for an engineer to grow. "It is important to learn some of the new technologies," he said.
The signs that everything is not right do not stop there. Infosys has also started offering paid internship to campus hires before taking them on rolls, a move that that would impact new jobs across the IT sector when hiring by technology services companies is already at a ten-year low.
Capgemini sets in motion massive re-skilling programme
French IT major Capgemini is targeting to train each of its 100,000 employees in the country in digital skills by 2018 as the contours of the outsourcing market undergo radical changes, a top official has said.
However, unlike Infosys and some other IT major, the company, as reported earlier, is also ramping up its hiring of freshers and plans to take the number up to 40 per cent of the total hires in a year from the 15-20 per cent now.
Like Capgemini, Tata Consultancy Services, the country’s largest software exporter, has spoken about skilling 100,000 of its employees in digital technology.
"We will touch each of our employee as part of the training programme with new skills in digital and cloud. The idea is to make them future-ready,"
Capgemini Chief Operating Officer for India Ashwin Yardi told a news agency.
However, while the company has already finished training nearly 60,000 employees since early 2016, Capgemini's India head Srinivas Kandula's recent remarks are not so optimistic. Recently, Kandula said that a majority of the workforce cannot imbibe the skill sets required for increasing use of digital technologies. Further, he warned of high job losses at the middle and senior levels.
Yardi, however, warned that employees who were not able to gain "competence in the new system" would be at "risk" five years down the line as they would become "less relevant" or even "obsolete".
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