Reports of mass lay-offs: IT still net hirer; focus shifting from scale to skill, says Nasscom

Nasscom said the firms regularly realign their workforce, an exercise which is linked to performance appraisal processes.

By: ENS Economic Bureau | New Delhi | Published: May 13, 2017 2:33:37 am
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AMID REPORTS of Indian IT companies axing hundreds of their employees on account of increasing automation and stunted sectoral growth, software services industry body Nasscom on Friday refuted the reports and said that the country’s IT sector “continues to be a net hirer with over 1.5 lakh people being employed on a net basis each year” even as the focus of hiring is shifting from “scale to skill”.

Commenting on software companies laying off a number of their staffers, Nasscom said the firms regularly realign their workforce, an exercise which is linked to performance appraisal processes, and is a regular feature every year.

“It needs to be appreciated that such workforce realignment is a normal part of the internal process of companies based on their own operational imperatives; companies evaluate their priorities and business imperatives and continuously align talent to serve their needs and enhance competitiveness. It is reiterated that no significant changes have been reported or observed this year,” Nasscom said.

Recently, reports have suggested that lay-offs have happened across the sector from companies such as Wipro, Infosys, Cognizant, which have said that it is part of the annual performance review process, which looks at weeding out the bottom rung of performers.

Even as the companies point towards the appraisal process, experts have pegged that the firms are making an attempt to control their costs at a time when they are facing regulatory heat from some of their biggest markets, including the US.

Since the Donald Trump administration took charge, several US agencies have either tightened the process to award H-1B visas or increased scrutiny on companies so applying under the visa programme.

Furthermore, last month, Trump signed an executive order, directing federal agencies to implement a “Buy American, Hire American” strategy. He called on the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security to “propose new rules and issue new guidance, to supersede or revise previous rules and guidance if appropriate, to protect the interests of United States workers in the administration of our immigration system, including through the prevention of fraud or abuse;” and to “suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries”.

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