IT Layoff: Dreams in Decline, Reality Bites!

This is a translation of a Tamil article published in June 2017 issue of Puthiya Jananayagam. This article throws light on the various dimensions of the recent developments in IT sector. We are republishing it here for the benefit of our readers. Please share your views as comments at the end this article.

When Swapna working in Cognizant, Pune was asked to put her papers by HR, she had just admitted her 3 years old child to an elite pre-school. She also has the responsibility to pay monthly installments of the housing loan for their family’s 2BHK apartment. Even as she pleaded for some breathing space for searching a new job, she was forced out with 2 months notice period.

Demonstration by NDLF IT Employees Wing in Sholinganallur, Chennai condemning layoffs by IT companies

The situation of Parvathi, (name changed) who worked in Wipro Chennai, is also very similar. Her profile was blocked from getting tagged to a new project in the company’s system. She was called by HR officers for an ‘important’ meeting and told that there is no place for her at Wipro anymore. Parvathi pleaded that her two kids in school, their fees, and other family commitments depend on her salary and if she loses this job her situation would become precarious. No mercy was shown and the process was carried out with automaton like firmness.

Thousands of IT workers face this situation all over the country. A study by Bangalore Mint reveals that the leading 7 IT companies Infosys, Wipro, HCL, Tech Mahindra, Cognizant, Capgemini and DXC plan to layoff around 56,000 employees this year. In another study, the recruitment company Head Hunters estimates that for next 3 years around 2 lakh employees each year would lose their jobs in IT sector. IT sector employing 40 lakh people and earning foreign exchange for Indian economy is considered to be the engine of economic development in India. This Titanic has now hit the iceberg and started taking in cold water.

Both 25 year olds and 40 year ‘olds’ have been woken up brutally. They had been indoctrinated to mind their “own job, own work and own appraisal” to earn a living in the heaven of “own income, own family and own future”. Now they are being pushed out of the promised heaven.

After 15 years of work, Nageshwar (name changed) working at Wipro Hyderabad has been rated ‘under performer’ and is being forced to resign. His manager has said that there was no particular reason related to his work, but the management has decided to cut costs and that his name has been shortlisted.

10 years ago, when Vinavu.com wrote a post calling on IT friends to form employees union for protecting their jobs and self respect at work place, many ridiculed the idea of  union for IT employees. They opted for money ignoring self respect. They did not fight for job security, right of collective bargain, etc. Now, faced with the corporate brutality in the form of forced resignations, many IT employees rush to read the clauses of ID Act 1947 and eagerly seek to know procedures for forming a trade union. Some fume that they were humiliated. Others explode that after so many years of working for the company how can employees be branded as under performers.

Modi’s IT Minister Ravisankar blurts out the line given by NASSCOM that there are no layoffs, only some under performers are leaving voluntarily and that this is business as usual. This minister has rubbed salt in the wounds of IT employees thrown out of jobs.

Many working class parents who thought they missed out on the post 1990s boom proclaimed by the media, sent their children to engineering colleges by selling their land/family jewelery or taking loans. They hope to get a place for their children in the IT led boom with the promise of hefty salary, air-conditioned offices, settling in US, etc. The hope is now shaken to the core. 12 lakh engineering graduates passing out every year compete over the paltry 1.5 lakh jobs offered by the IT sector annually.

Image from the WWW

Adding non-engineering graduates to these numbers, 60 lakh new job seekers enter Indian job market each year. IT companies are profiting from this reserve army of educated youth by sacking the older employees with relatively higher salaries and hiring fresher as sub-contractors. The trend of using fresh graduates to work for low salaries under various names like apprentices or trainees with no or very less stipend, has caught up in the IT sector also.

Capitalistic analysts attribute automation, Trump’s policy of “American jobs to Americans” and tightening of H1B visa regime as causes for these layoffs. But the root cause of automation and American politics is the unquenchable thirst for profit of the financial capital.

To understand the dynamic let us look at Cognizant-Elliot agreement. In November 2016, Elliot Management, an investment company, bought 4% of Cognizant’s shares for $1.5 billion. Then it wrote to Cognizant and asked it to increase its operating margin from 18.5% to 21%. The demand of a new investor took precedence over the welfare of Cognizant employees working for many years, leading to the current job cuts in CTS.

25 years ago, the same capitalists started replacing American IT workers with Indian IT workers to earn windfall profits for themselves and their investors. Now they are set to replace Indian employees with automation. Ofcourse, machines do not take tea breaks, go on maternity leave and can be made to work 24×7. They will not protest or demand extra pay.

Yes, the law of capitalistic mode of production is using human power only where the work cannot be mechanized. Experienced employees are fired when they are not needed to maximize profits, even though they have the required skill sets and are willing to work.

As the replacement of humans by machines increases, the consumption demand for produced goods and services reduces. As this contradiction worsen, capitalist economy plunges deeper and deeper into crisis. The capitalists dream of escaping the doom by creating new jobs with the help of new technologies like nano technology, cloud computing, artificial intelligence, space exploration, environmental protection, renewable energy, solar power, etc.

But the motto of capital is not to provide employment, to make more profit. In an economy driven by this logic, IT professionals should shed the narrow mindset of “my job, my life”, to start thinking about “our jobs, our lives” and extending it to include “our people, our country”. Yes, it is time IT employees join hands with the struggle of all working people.

– Sakkian

Courtesy : Puthiya Jananayagam, June 2017
Translation: Nesan