The Growing Trend of Silent Layoffs in India's IT Industry

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The Growing Trend of Silent Layoffs in India's IT Industry

Introduction: The Rise of Silent Layoffs:

The Indian IT sector is currently facing a new challenge: silent layoffs. These discreet job cuts have affected over 20,000 employees, as reported by the All India IT & ITeS Employees’ Union (AIITEU). 

Unlike traditional layoffs, these are conducted subtly, often coercing employees into resigning without making it publicly known.

The Surge in Layoffs:

Data shows that between 2023 and 2024, thousands of IT service employees lost their jobs due to a challenging demand environment. These layoffs spanned across companies of all sizes. 

According to AIITEU, around 20,000 employees were let go quietly within India’s IT/ITeS sector in 2023. In 2024, the Nascent Information Technology Employees Senate (NITES) estimates that 2,000-3,000 professionals were silently laid off by top Indian IT firms.

Companies Involved:

Reports have implicated companies like Teradata, State Street, Accenture, Cognizant, and Infosys in these silent layoffs, although Infosys and Atos Group have denied any involvement. .

The AIITEU believes the actual number of layoffs is higher than reported. They also highlight that current employees are working longer hours, often up to 14-16 hours daily, compared to the 10-12 hours typical a few years ago.

Historical Context and Current Trends:

The trend of significant layoffs began in 2022, with major tech companies like Amazon, Alphabet, Microsoft, and Meta cutting thousands of jobs. 

The following year saw a 59% rise in job cuts, totaling 262,915 layoffs across various firms. This surge was attributed to economic downturns, overhiring during the pandemic, and strategic restructuring. Despite months of massive layoffs, the tech sector continues to see job cuts in 2024.

The Numbers So Far in 2024:

According to Layoffs.fyi, 98,834 employees have already been let go by 337 tech companies in the first half of 2024. Companies are focusing on reducing operational costs, leading to further job cuts. Amidst this, a more insidious trend is emerging: silent layoffs. 

The Mechanics of Silent Layoffs:

The Indian IT and IT-enabled services (ITeS) sector is increasingly resorting to silent layoffs, subtly pressuring employees to leave without making it public. AIITEU reports that around 20,000 tech professionals were affected by such unannounced layoffs in 2023, with actual numbers suspected to be higher.

Silent layoffs often give employees a 30-day period to find a new position within the company. Failure to secure a new role typically results in termination. This allows companies to reduce their workforce quietly, avoiding public scrutiny and backlash.

Impact on Employees:

NITES reports that 2,000-3,000 employees were silently laid off in the first five months of 2024 from leading Indian IT service companies. Employees resisting these tactics are often terminated immediately, making it difficult for them to find new jobs. Silent layoffs often involve placing employees on performance improvement plans (PIPs), leading to stress and job insecurity.

Silent Layoffs vs. Quiet Firing:

Silent layoffs are often confused with quiet firing. While both involve pressuring employees to leave, they differ in execution. Silent layoffs typically provide a notice period, allowing employees time to transition. Quiet firing makes employees' roles increasingly undesirable, compelling them to resign.

Conclusion: The Future of Silent Layoffs:

As the tech industry navigates these turbulent times, silent layoffs pose a significant challenge for employees. While companies view these strategies as necessary for survival, the impact on employees and their careers is profound. It remains to be seen how the industry will address these issues and support its workforce during such challenging times.

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