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Mass layoffs brewing in IT sector amid uncertainties

Mass layoffs brewing in IT sector amid uncertainties

The information technology industry is laying off thousands of employees across the globe, including in India, on grounds of non-performance, lack of projects and rightsizing the workforce as pressure mounts on firms because of an uncertain business environment.

Global IT companies have gradually reduced their headcount in last two years as they embark on automation and related technologies. The covid crisis may have accelerated these process as newer challenges have emerged for these firms.

IBM Corp. is laying off about 2,000 employees globally as the company reshapes its business. It is estimated that a few hundred of its India employees would be affected as the country accounts for about one-third of IBM’s global headcount of more than 350,000 employees.

Nasdaq-listed Cognizant Technology Solutions Corp. recently laid off thousands of workers in India, who were on the bench. India is Cognizant’s largest employee hub with more than 200,000 employees of its global headcount of nearly 290,000.

In IT services companies, employees on the bench are considered “non-billable" resources as their cost is not billed to any client. Typically, firms maintain a small percentage of bench employees so that they are prepared to execute new projects immediately.

Accenture is cutting up to 900 jobs in the UK to reduce costs in the face of lower demand for its services, according to reports. 

Indian IT services companies such as TCS, Infosys Ltd, Wipro Ltd, and HCL Technologies Ltd may not have undertaken any massive layoffs but performance-based exits could be taking place.

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