What are the silent layoffs that wiped out over 20,000 IT jobs in India

India’s IT sector has been hit by the trend of silent layoffs, in which individuals are asked to tender their resignations after being offered a 30-day grace period to find employment within the same company. These layoffs are being carried out in a structured manner as part of a cost-cutting exercise, according to industry observers.

What are silent layoffs in the IT sector. (Photo credit: Pexels)

New Delhi: Quiet layoffs eliminated more than 20,000 jobs in the IT and IT services sector last year, according to the sector’s employee representative body, the All India IT & ITeS Employees’ Union (AIITEU). This feature has impacted businesses of all sizes across the industry.

What are silent layoffs

A silent termination is a practice in which an employee is given a 30-day grace period to find a new job within the same company. If the individual fails to secure employment within this time frame, they are asked to resign and offered 3 to 4 months’ salary as severance pay. These layoffs are not new and have been part of IT industry employee management practices for many years. Silent layoffs are characterized by the discreet nature of the layoffs.

According to the Nascent IT Employees Senate, a representative body of IT employees, between 2,000 and 3,000 professionals will have been laid off in 2024. This trend is also widespread since it allows the employee to look for a job without wearing the label of being fired by their employer, Moneycontrol reported, quoting NITES Chairman Harpreet Singh Saluja.

AIITEU general secretary Saubhik Bhattacharya said that in some cases, employees were also required to sign non-disclosure agreements as a precondition for payment of their full salaries. Another trend that has gained momentum is the extension of working hours of existing employees from 10 to 12 hours to 14 to 16 hours, Bhattacharya added.

Which companies have made silent layoffs

Calling it a structured layoff, Saluja said companies were eliminating jobs in a phased manner, in batches of 10 to 20 people. This trend was also reflected in the nearly 69,197 employees who have been laid off so far in FY24 by the top 5 IT departments:

TCS
Infosys
HCL technology
Wipro
Tech Mahindra

International IT companies that have laid off staff in India as part of the silent layoff trend include:

Teradata
Status Atos Syntel
Accenture Conscious
Infosys

True, Infosys and Atos Syntel have denied the layoffs, Moneycontrol reported. Accenture, Cognizant and State Street also did not respond to queries, Money control reported. IT services companies rely heavily on downsizing to maintain margins as they have no credible leverage beyond this option, Moneycontrol reported, citing Yugal Joshi, head of technology services research at Everest Group.