According to the All India IT & ITeS Employees’ Union (AIITEU), more than 20,000 employees techies lost jobs in ‘silent’ layoffs in FY24 alone.

However, according to the General Secretary of AIITEU Saubhik Bhattacharya, there is much more to this crises, as there are plenty of problems that the sector faces currently – delayed onboarding, no payment for overtime, no local point of contact for employees working from hometown and the announcement of a failure of background verification after employees have joined the organisation.

According to the association, the actual numbers may well be over 20,000, and what is worse is that many of the companies are forcing employees to resign so they can cut costs by not granting severance packages.

Nascent Information Technology Employees Senate (NITES) president Harpreet Singh Saluja noted that in the first five months of this year alone, about 2,000 to 3,000 employees have lost their jobs.

Compounding the problamatic trend is that these silent layoffs happen across locations, cities and projects.

He cited an example illustrating if there are 80 members in a project, two to three people are fired, citing various reasons.

Also, in a silent layoff, an employee is most likely given a 30-day notice period to find a new role within the same company, and if they are unlucky enough not to find one, the most likely outcome is for the employee to be asked to leave!

However, what about the fact that if an employee is asked to leave, it carries a heavy weight, the stigma of termination, how would employees handle such?

The Drum Roll
Companies are apparently implementing various ways to remove employees, and if some resist, they stand to lose out even on the notice period, as most likely, the employee is sacked immediately.

Once that happens, the relieving letter would show as ‘terminated,’ hence the likelihood of finding a good job becoming extremely difficult.

Saubhik Bhattacharya, General Secretary of AIITEU, says employees are also sometimes required to sign non-disclosure agreements (NDAs) to receive their full payout.

According to Bhattacharya, it doesn’t end with downsizing teams; existing employees are now being made to work for 14-16 hours each day, compared to 10-12 hours a couple of years back.

This trend is becoming a fast one across all companies. With the intention of downsizing and improving profit margins, companies are increasing the number of hours each employee works.

Downsizing, Resizing, Streamlining, The Buzz Words
These layoffs are said to be happening irrespective of the size of the companies.

For example, Teradata, a San Diego-headquartered cloud analytics and data platform company, laid off about 35-40 employees from its Hyderabad campus at the end of last year.

The latest step came after the company had previously let go of about 1,100 employees globally, including in India, in 2022; according to a professional networking site, Teradata has over 10,000 employees globally.

Similarly, when Boston-headquartered financial services company State Street took over joint venture partner and technology service provider
Atos Syntel’s operations in India last year, roughly 400-500 employees were let go in India in March 2024 as a part of streamlining operations.

And if you were under the assumption that perhaps only small or midsize companies are part of this trend, think again—this is true for large industry players as well, such as Accenture, Cognizant, and Infosys.

In fact, multiple sources said that Infosys has laid off nearly 200-500 employees across campuses in 2024, though this has been done by asking them to resign voluntarily.

However, both Infosys and Atos Group denied laying off employees.

Releasing Media Statements
Shaji Mathew, Group Head of Human Resource Development at Infosys, said, “We would like to clarify that there have been no layoffs at Infosys. As an organization, we have consistently focused on high performance and exemplary work ethics. We are continuously investing and reskilling our employees for seamless career transitions, with an aim to enable all our employees to stay qualified and proficient in an increasingly AI-powered global industry ecosystem.”

A spokesperson for Atos Group said, “The Atos Group in India has not implemented any large-scale redundancies during the current year. Please note that State Street took full ownership of its joint venture with the Atos Group (State Street Syntel Services Pvt. Ltd.) in 2023.”

A Teradata spokesperson stated, “This is a normal course of business for a global organization, which sometimes means re-aligning our people to our priorities. We do not take these actions lightly and treat any departure with utmost respect and support”.

Adding further, “Teradata is focused on sustaining profitable growth, while remaining agile, and investing wisely. We are a company that competes in a dynamic market, and as technologies evolve and the market shifts, we occasionally adjust our organization to retain and advance our position.”

The Mega Job Losses And The Inevitable Structure
According to industry experts, the last time such record-high layoffs occurred was during the financial crises of 2007-2008.

The mass layoffs then were attributed to challenging macroeconomic scenarios, and a similar picture is emerging in the current scenario as well. Hence, as revenues falter, the next best thing/ option is to lay off.

Again, experts explain that this is not a mass layoff but a structured one.

Suppose a particular IT services company wants to lay off 1,000 employees; they will do it in stages each month, letting go of 10 to 20 employees from different offices in various cities.

This process will likely last for three months, and because it’s spread out, it will not attract much attention.

The same is also reflected in the trend in overall headcount decline for the top five Indian IT services companies for financial year 2024.

The five companies are Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, and Tech Mahindra.

Together they lost around 69,167 employees in FY24, amidst an uncertain demand environment, delays in deal ramp-ups, and cancellations.

For some like TCS and Infosys, the full-year headcount plunged for the first time in two decades.

“The top five companies’ combined headcount declined in the previous quarter. A good part of it is silent layoffs, which is around performance management and other things,” said Joshi.

Joshi says IT services companies have been laying off employees for some time now, but this time, the number might be higher than usual due to a plethora of reasons. They may vary from macroeconomic uncertainty to the impact of artificial intelligence (AI) on productivity.

Experts say Indian heritage IT services providers have changed their operating models, and they want to make every technical person a billable resource.
A billable resource is an employee who has been deployed in some project, and a client pays for the work she/he does.

“Many people, even at the middle level are carrying some sort of influence or tagged revenue number, and that is creating a problem because not everybody wants to do that. And of course, if they don’t do it, it’s the way out,” said Joshi.