Worsening situation? Infosys, Wipro to cut jobs; middle-level employees to be worst hit

As more and more IT companies are looking to hire in the US, they are downsizing staff in India, inviting wrath of employees, who are now approaching labour unions.

After reports Cognizant laying-off as many as 6,000 employees in India surfaced, it sent jitters to the employees. Cognizant has also come up with a VRS programmes, asking top level employees to take it up.

Apart from Cognizant, Infosys, Wipro and Capgemini are also preparing for lay-offs.

As per reports, Infosys may ask around 1,000 employees in job level 6, which comprises group project managers, project managers, senior architects and higher levels, to leave.

Even Wipro CEO Abid Ali Neemuchwala, in an internal conference call, said nearly 10% of employees would be let go this year if the revenues did not grow.

In Wipro, the product engineering team may face the heat. Various reports suggested even Capgemini will sack 9,000 people, or nearly 5% of its workforce. However, the company said they don't have any lay-off plans.

"We expect to recruit more than 20,000 new team members in India this year. Each year our employees are evaluated based on strict performance criteria in an objective process, consistent with industry norms, to ensure we are aligned with our customer needs, business priorities, and the overall industry evolution. This leads naturally to a varying number of employees transitioning out of the organization in any given year. We are highly committed to continuous talent development and building the capabilities of our employees to help them stay relevant. We continue to accelerate our training programs in 2017 with over 2,000 India employees having already undertaken up skilling and emerging technologies training alone," Capgemini said in a statement.

Peter Bendor Samuel, CEO of IT consulting firm Everest Group, told Times of India the industry growth has slowed and the "arbitrage first" segment (traditional IT services) is in secular decline. "When this is added to the pyramid factory model, which requires new freshers to be brought in every year to keep cost low, it results in an excess of more experienced employees," he said.