The Karnataka State IT/ITeS Employees Union (KITU) will approach the labour department against tech firm Cognizant, who has been allegedly laying off thousands of employees in the name of effectively managing workforce utilisation. However, even as the union remains firm on its stance, Cognizant denied any such sackings. "While Cognizant does not comment on rumour and speculation in the marketplace, we would like to clarify that recent third-party allegations regarding a specific number of job actions are not accurate, not based on facts and were not announced by Cognizant. Cognizant continues to hire at all levels in India and globally. Likewise, the company continues to invest heavily in upskilling and reskilling its employees at scale in newer digital technologies, including cloud, analytics, digital engineering and IoT, where the company is seeing above industry-average growth,” said the Cognizant spokesperson.
It added that performance management is a normal process across all companies in the IT industry.
However, KITU countered the Cognizant statement. "We have been receiving complaints from many Cognizant employees since the last two weeks. They say that they have been told that their performance has not been as per expectation. Many of them even say that they have been moved away from live projects and have been forced to sit on the bench without any work in hand. We get around 20 calls a day both from Tamil Nadu and Karnataka. Those who are not willing to resign are being issued termination letters. We have asked them not to resign and hang in there. We will help them legally and approach the labour department with a proper complaint,” Sooraj Nidiyanga, Secretary at KITU told THE WEEK.
Terming such terminations as illegal, KITU asserted that according to labour laws, any company that employs more than 100 employees need to obtain approval from the labour department in order to execute layoffs. KITU has opened a help desk to assist the affected employees in this matter.
According to various media reports citing KITU, thousands of benched employees at the IT major were being shown the door.
However, given the situation, it needs to be factored that involuntary attrition is normal in almost all the IT companies. Many employees are regularly moved to the bench when there are no live or active projects available. It so happens that, at times, many projects get curtailed in between.
IT companies have hundreds of clients from different segments, including services sector, travel and tourism, retail and manufacturing that have suffered immensely due to the COVID-19 pandemic. Hence, these companies may delay their future IT projects or put them on hold.
Clients from the BFSI (banking, financial services and insurance) and the healthcare sector might also delay their projects. They may defer their existing projects by two to three months and restart them when there is clarity about their business prospects.
If a project is deferred or postponed, then the employee working on the project becomes non-billable and may be without work till the time the project revives or they are assigned a new project by their company. If there are no new projects for such employees and they cannot be shifted to a new project, they will be left with no work for a long time. This may lead to involuntary attrition.
“Cognizant has been facing growth issues over the last couple of years. They had announced a VRS scheme too, and had given severance packages to those opting for it. Due to the Covid-19 scenario, many clients have been non-committal on the future of many projects. There is involuntary attrition every year in almost all IT companies. However, when you compare the numbers, it is miniscule. Large IT companies such as Cognizant have lakhs of employees and when a few hundreds leave, it is a small number,” remarked Amit Chandra, Assistant Vice President IT research at HDFC Securities.
