In a glancing blow to the IT dream of millions of job aspirants and engineering graduates across the country, Cognizant Technology Solutions is likely to lay off around 6000 employees, a figure which is a tad over 2 percent of its workforce. Automation, once again, is being blamed behind the mass layoffs as it renders many lower-end jobs redundant. The Nasdaq-listed Cognizant, which is one of India’s and the world’s largest IT companies, had nearly had 2.6 lakh employees as of December 31, 2016. The company has stated that the layoffs are a part of its annual exercise to pinpoint and eliminate poor performers.
The variablepay system, common in IT companies, is also likely to be adversely impacted this year, according to sources familiar with the inner workings of the company. The company is seen as one of the best IT companies in the world and it does take such drastic measures from time to time. This is, however, the first time that more than 2% of the workforce has been laid off. Last year, only around 1% of the total workforce had been laid off. The data has consistently shown that less than 2% of the workforce has been laid off every year.
Automation is the single main reason behind the mass layoffs, according to leading industry analysts. With an IT industry on the verge of a digital revolution, many skilled employees on the lower end of the spectrum are finding themselves redundant. Tim Cook, the Apple CEO, had recently stated that the machines which take over the jobs of humans should also contribute to the economy by paying taxes.
Although it is not immediately clear which countries will witness the layoffs, CTS spokesmen have repeatedly stated that the entire process is a routine one. In emailed responsesto queries, the spokespersons stated that the layoffs were in light of the company’s workforce management strategy. The company stated that it regularly conducts regular performance reviews in order to ensure that only those candidates with the right skill sets are retained by the company. The list also includes employees who are gradually on the way out of the company as well. The entire exercise, the company stated, was based on performance or the lack of it. Cognizant has been facing economic doldrums recently with a slow growth of 8.6% last year. Whether other IT giants follow suit is something only time will tell.