Layoff Practice : Corporates have evolved. So should we.

There is a famous comedy in a Tamil Movie, by actor Vivek, involving a scoundrel named Minor Kunju who raped a girl in a village. Despite the affected girl’s complaint in the village panchayat, the panchayat would let the accused off and order the scoundrel to pay certain amount of money to village temple as punishment, which they say is usual in such rape cases.

But the affected girl, calling the judgement as stupid, would say that it will not fetch her any remedy and it will encourage minor Kunju to misbehave with more women in the village. On the other hand Minor Kunju would be very happy with the judgement and will be ready to pay double the amount of the fine money as an advance for his future rape attempts.

We can draw a parallel with this case and judgement to the layoffs in IT industry and the way Government handles it. The companies are like the Minor Kunju and the Government is acting like the village panchayath encouraging the corporates to repeat the same crime again and again.

Last week there was a news in all leading magazines about the planned layoffs in SAP, in which almost 400 employees are targeted in India and 4000 employees world wide.  Bank of New York Melon already laid off 500+ employees few months ago and are now planning to layoff 300+ in their second round. There are more layoffs happening in Oracle Corporation Bangalore and other locations in India.

The process followed by the IT companies, during the layoffs have changed drastically in recent times, after the rise of unions like NDLF and FITE. Earlier the affected employees will be given 2 month notice period and would be in the company payroll for this 2 months. This gave the employee time to think about the way the company obtained resignation from them and about their future career. And with more employees understanding about being sacked illegally there were more number of cases with the Labour Commission.

Now the companies have changed their layoff process and are sending out the layoff victims within a single day. An employees selected for layoff would be called for a personal interview with the HR in the morning as soon as they arrive. They would not be intimated about the purpose of the meeting. In that meeting the employee would be forced to resign, and all dues from the employee (ID, Laptop etc) would be collected immediately and a security would be assigned to escort the employee out of office. With this the employee will not even have time to re-think about the decision made and would be out of company payroll within hours of resignation.

The other change these MNCs brought in, is with the severance package paid to the layoff victims. We spoke with many employees who were working in these companies and got terminated.  They gave their experience to make outside world understand how these layoffs are happening.

Vijay (name changed) is working in Bank of New York Melon for past 15 years. He was called for the exit interview and as part of negotiation, he was offered 1 month severance pay for every years of service he put in with BNY Melon and with some bonus. All these bonuses and severance package offered by BNY melon totals up to twenty three lakh as compensation for the final settlement amount. We spoke with another employee who has less than 5 years and he was also offered with around 5 lakh compensation. The same way is followed in Oracle but compensation as well as the final settlement calculation formula varies.


The HR officer along with a Psychiatrist as a part of the exit panel, would convince the employee that the final compensation offered is an excellent package. The layoff victim can find his/her next job in short span of time. This severance package will stand as bonus for them and it is a good opportunity for them to take this settlement money and end employment contract with the company.

99% of the affected employee will accept this offer as these companies created a general perception that hire and fire is legal in IT industry. These employees are made to believe that they will find good job outside. BNY Melon has its own confession page managed by top management and they publish various news to create negativity among employees and spread perception that settlement package is in best interest of the affected employee. We can see posts like affected employee posting that they got another job with 50% hike after they are affected with layoff and BNY Melon is not the end of world. So most of the employees who fell prey in this trap set by the management had signed the bonds.

This is the prime reason for the affected employees not coming out to take the fight against the company. Even if remaining 1% take the fight with company and refuse to resign, these companies boldly terminate that employee. These companies are taking this risk, because the probablity of terminated employee taking up the fight against the company, which can go for several years, is very less and terminating 1% would make remaining 99% obey their orders and submit resignation without showing any objection.

I talked with one of my college buddy who was laid off last year. He worked with Verizon for 15+ years and he was also offered around 25 lakhs as exit compensation. During our discussion, I mentioned that he can take the legal fight with the company and approach unions to seek remedy. But he refused mentioning that he can manage his life with the compensation received and was so confident that he would definitely get a job with less than 6 month.

He was laid off in Dec 2017 as part of the first wave of layoff conducted by Verizon. I hope people remember the news of this trend setting layoff by Verizon where they used bouncers and doctors for the first time in Indian layoff history.

But unfortunately he is yet to get a job till date and when I spoke with him last month, he mentioned that he has spent most of his compensation money within this time. He also mentioned that now-a-days he is losing confidence of getting a new job. He is around 44 years old and this makes the risk, of him losing his 14 years of services before retirement. I know various people who are laid off in the age of early 30 and are still looking for jobs for more than 1 year.

The company’s approach for layoff is now a sugar coated poison coming with high severance packages. The big MNC like BNY Melon is far better than Indian IT Giants. Companies like CTS, Tech Mahindra are laying off people and they are not ready to pay any compensation. They offer only 2 month of notice period as final settlement money. These companies are not feeling bad in laying off people and one typical example is CTS president Raj Mehta comments on expressing their layoff practices as removing senior waste dead woods from top of the pyramid.

When employees in this company like CTS themselves are not taking the fight, it is quite natural for employees working in MNCs not taking any fight as they received hefty compensation. But sad truth is this compensation gives only a virtual remedy in the lives of many employees.

The layoff practice in these companies is exactly like the Minor Kunju way of raping innocent women. These companies are planning layoff well ahead and even openly mention that several millions will be spent for carrying out layoffs. That is, they are paying for the advance booking like Minor Kunju did. This can be proved with various layoff news coming daily in several magazines.

Labour office, State and Central Governments are exactly dealing in the same way the village panchayat did in the above movie. They are not ready to provide any remedy to the affected employees. They are just closing their eyes on layoffs and also exploring various ways to help companies in doing layoffs in an even better way.

The typical example is the Central Government’s recent plan to liquidate 43 labor laws to help corporates. I will write a separate article in this topic, on how labor laws will be tossed in air by the actions of the Government.

In the movie, Vivek would shoot Minor Kunju as punishment for his act. The employees expect similar remedy and expect government to give them the remedy in the form of reinstating their jobs. But unfortunately it has been proved in various circumstances, that the government and the corporates are helping each other to improve profit margins of corporates. The only solution to this problem is employees joining together as union and takeup the fight against the corporates as a single entity to protect their future.

Shyam Sundar


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    • Suge on February 11, 2019 at 10:11 pm
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    //We can draw a parallel with this case and judgement to the layoffs in IT industry and the way Government handles it. The companies are like the Minor Kunju and the Government is acting like the village panchayath encouraging the corporates to repeat the same crime again and again.//

    Nice comparison…

    • Kasirajan on February 11, 2019 at 11:06 pm
    • Reply

    Capital punishment has to be recommended for proved illegal layoff in private organization.

    • Kasirajan on February 15, 2019 at 11:44 pm
    • Reply

    Advance Booking Layoffs are happening in IT industry

    • Vijay on February 16, 2019 at 12:56 am
    • Reply

    Well Said

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