Infosys, Wipro and 5 other IT firms reportedly to lay off over 50K employees this year

Indian IT sector would be witnessing mass layoffs in 2017 that could reach over 50,000. Apparently, 7 of the biggest IT firms are planning to hand over pink slips to at least 56,000 employees this year, reports Livemint.

In the wake of US administration's new 'perfectionist' policies and perhaps under-preparedness of the sector in adapting to newer technologies, seven companies namely Infosys Ltd, Wipro Ltd, Tech Mahindra Ltd, HCL Technologies Ltd, US-based Cognizant Technology Solutions Corp., DXC Technology Co., and France-based Cap Gemini would be letting go 4.5 percent of their workforce in 2017.

Despite hiring new engineers, two of the seven HR heads confirmed to livemint that many of the firms will end with fewer employees than they started with by the end of the year. Each of these seven companies has already put a higher number of employees on notice by awarding them the lowest ratings.

Last week, Cognizant Technology Solutions offered its top executives - directors, associate VPs and senior VPs - a voluntary separation package, a part of its plan to shift operations to automation and digital technology. It was reported that at least 1,000 executives are expected to go. The company is expected to eventually cut at least 6,000 jobs or 2.3 percent of its total workforce.

Attributing the 'planned' exits to a marginal increase in a number of poor performers due to more intense performance evaluation processes, all seven IT firms denied any layoffs, the report said.

Analysts believe that the root cause of the problem is the changing business model that Indian IT companies are trying to come to terms with. Newer technologies are taking businesses away from a people-led model, which means they need fewer employees. The second reason, of course, is the Trump's new policies forcing Indian IT firms to call back their H-1B Visa holding employees.