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56,000 Layoffs and Counting: India's IT Bloodbath This Year May Just Be the Start (qz.com) 211

Posted by BeauHD from the rough-time dept.
An anonymous reader quotes a report from Quartz: For Indian techies, 2017 was the stuff of nightmares. One of the top employment generators until a few years ago, India's $160 billion IT industry laid off more than 56,000 employees this year. Some analysts believe this spree was worse than the one during the 2008 financial crisis. Meanwhile, hiring plummeted, with entry-level openings having more than halved in 2017, according to experts. Tata Consultancy Services (TCS) and Infosys, two of India's largest IT companies and once leaders in job creation, reduced their headcounts for the first time ever. Even mid-sized players like Tech Mahindra retrenched several employees.

Compared to the normal rate of forced attrition (i.e. asking non-performers to leave) of around 1% in earlier years, 2017 saw Indian IT companies letting go of between 2% and 6% of their employees, said Alka Dhingra, general manager of IT staffing at TeamLease Services. Infosys cut 9,000 jobs in January. "Instead of 10 people, what if we have three people to work on (a project). If we don't have the software, then some others will take the advantage (away from us)," Vishal Sikka, the former CEO of the Bengaluru-based company, said in February. Meanwhile, around 6,000 Indian employees at Cognizant reportedly lost their jobs to automation.
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56,000 Layoffs and Counting: India's IT Bloodbath This Year May Just Be the Start More

56,000 Layoffs and Counting: India's IT Bloodbath This Year May Just Be the Start

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  • Non-performers...1% (Score:5, Insightful)

    by HornWumpus ( 783565 ) on Wednesday December 27, 2017 @05:34PM (#55818097)

    WTF? 1% of Indian techs are incompetent?

    Is this the new king of broken metrics? What is 'competent'?

    • Re:Non-performers...1% (Score:5, Funny)

      by Scarred Intellect ( 1648867 ) on Wednesday December 27, 2017 @05:37PM (#55818121) Homepage Journal
      I think my company hired those 1%....so don't worry, they're still gainfully employed!

    • I had the same reaction - but I rationalize a 1% attrition rate when the Indian tech bubble was in full swing and companies were desperate for people and needed somebody that could do basic, necessary, tasks (like setting up computers for individuals that could code).

      Now that the market is saturated, companies will start taking a sharper look at their hiring practices and employees on staff.

      • Re:Non-performers...1% (Score:4, Funny)

        by HornWumpus ( 783565 ) on Wednesday December 27, 2017 @05:54PM (#55818221)

        Nobody bats 990 in hiring. Especially not when the market is super hot. That calls for a higher kick rate, not lower.

        Anybody claiming 'we have only 1% incompetents.' is actually saying 'We never question management, revisit decisions or do anything like failure analysis. (Our Brahmen's shit doesn't stink.)'

        The deeper cause has to be clients slowly getting smart and changes to US visa laws.

        Who the fuck still hires Tata? I would, if I hated my employer, was six months from retirement and wanted to wreck the joint. Would the SEC consider knowing they had hired Tata insider information?

        • Re: (Score:2)

          by swb ( 14022 )

          Would the SEC consider knowing they had hired Tata insider information?

          Has anyone ever done a statistical analysis of Tata's customers to find out if "hiring Tata" is actually some kind of predictor of a company having problems (lost revenue, profit margin, drop in stock price, etc)?

          • Re: (Score:2)

            by Cederic ( 9623 )

            You'd have to be a lot more nuanced than that. I've used Tata Consultancy Service, albeit only due to management demands.

            Management made those demands for three bloody good business reasons: TCS were the cheapest bidder, and they delivered on time, and they delivered to budget.

            That's management mana.

            Of course, what they delivered was exactly what was asked for, nothing more, whether it made sense or not. What they delivered was horrific quality, so you had horrible support overheads. What they delivered was

            • Re: (Score:2)

              by swb ( 14022 )

              Of course you'd have to come up with a more refined thesis, but I was mainly thinking in terms of statistical averages -- do businesses that hire Tata generally outperform or underperform the market? What qualities do each group have?

            • If you're going to use outfits like that you need people in-house who can write really good specs. Trouble is people like that are quite rare.

              If Tata built a house it'd have doors where you asked for them but they wouldn't open because "contract was not saying this thing".

        • Re: (Score:2)

          by Cederic ( 9623 )

          Maybe they measure competence as "People actually paid us for this person's time".

          It's frustratingly difficult to get specific people taken off an account.

      • Re:Non-performers...1% (Score:5, Insightful)

        by Junta ( 36770 ) on Wednesday December 27, 2017 @05:56PM (#55818239)

        companies will start taking a sharper look at their hiring practices and employees on staff.

        Hilarious. But seriously, their industry is made to look really bad by the get rich quick outsourcing. The good news is that being in that position allows them to make out like bandits by charging for work to be done and then hiring unqualified to fulfill the arrangement. The bad news is everyone starts assuming that's what the entire India IT tech industry is, and that's very unfortunate and is a big obstacle to ambitions of truly stepping onto the world stage as a first class industry rather than just the cheaper choice.

        It's similar to China's situation with manufacturing. They got in the door by, among other things, compromising on quality for the sake of cost. Now as they are doing a lot to improve the situation, they have a lot of skepticism to overcome from previous experience. Similarly South Korea was a source of crappy knock-off product though the mid 90s, but they have successfully moved beyond that.

        • With a 5 digit ID you should be able to remember when Japan was like that too.

          • Re:Non-performers...1% (Score:5, Interesting)

            by gtall ( 79522 ) on Wednesday December 27, 2017 @06:26PM (#55818387)

            I have a 5 digit ID and I can certainly remember Japan being synonymous with poor quality. They were also known for low end of any markets. Then they got smart, hired efficiency and quality experts and having a fairly uniform population, were able to pull out of their rut. That was the second phase. Now they are into their third phase where some of their industries are tired of the constant improvement and are looking to cut corners and their managers make off with the loot before the shit hits the fan. Maybe they'll pull out of it before hitting a wall.

            • Re: (Score:2)

              by JustOK ( 667959 )
              Both Hong Kong and Taiwan were "big" producers for awhile too.

            • Re: (Score:3, Informative)

              by Anonymous Coward

              I have a 5 digit ID and I can certainly remember Japan being synonymous with poor quality.

              Indeed. They made a joke about that in the Back to the Future movies, playing upon how different generations viewed Japan, where 1950s Doc Brown commented something to the effect of "No wonder this circuit failed, it says made in Japan." to which 1980s Marty, who's fond of the Sony Walkman and other Japanese electronics, replies "What are you talking about Doc? All the best stuff is made in Japan."

            • Not sure /. id length is a great measure of age, but I remember Hong Kong and Taiwan as the 'low quality' manufacturing base - cheap injection moulded toys, that kind of thing. Japan were seen as high quality precision manufacturers in the early 80s - to the point where British companies would adopt Japanese sounding brand names for their electronic products (Saisho springs to mind). Pentax, Fuji, and Sony, Toshiba were seen as quality brands.

              China has performed the remarkable feat of retaining it's low cos

              • China has performed the remarkable feat of retaining it's low cost low quality manufacturing base at the same time as building a very competitive high quality manufacturing sector.

                China is really really big, and is advancing as fast as it can. This means that advancement is necessarily very uneven, and if a tenth of the population is up for high quality manufacturing that's as many people as most countries. As advancement evens out, the low cost manufacturing will continue to go to cheaper areas like mu

              • Not sure /. id length is a great measure of age

                It establishes a lower limit, unless you think it's possible to create one before you're born.

              • ARMAGEDDON (1998):
                Lev Andropov: Components? American components, Russian components, ALL MADE IN TAIWAN!

                I certainly remember when that was the joke. Hard to believe that was 20 years ago now!

                I don't go far enough back to remember a Japan that was considered low quality. However I do recall how South Korea, mostly in terms of auto manufacturing, was considered junk, but have since turned that around. So much so, that getting a used KIA is so cheap because they depreciate so quickly because of the still linge

            • Re: (Score:2)

              by AmiMoJo ( 196126 )

              It was different with Japan though. China builds down to a price that the West wants. They can do really high end too, it's just that most people want cheap.

              With Japan they wanted quality from the start, and during the war demonstrated it with things like some very competitive aircraft. But after the war everything was in short supply, Japan has few natural resources and a lot of talent had been lost. Even so, by the 60s they were offering the best technology in the world. High speed rail, cameras, audio. O

          • Re: (Score:2)

            by Junta ( 36770 )

            I was told about Japan being in that situation, but I think that was a tad before my time. I barely got to see South Korea go through it.

            They both serve as symbols of how poor reputation can be forgiven in relatively short timespan.

            • I don't know that S Korea is quality now. More 'average'...Better than French or English cars...Talk about faint praise.

              Both turned around relatively quickly, on their schedules China should be closing in on 'quality'.

              But it's changed over the decades. Japan built companies that still turn profits. Korea IS two big companies. China is a huge job shop that largely turns 1% gross profits.

    • Re: (Score:2)

      by jeremyp ( 130771 )

      No that's not what it said. It actually said one percent are so incompetent that they had to be fired.

    • Re: (Score:1)

      by torkus ( 1133985 )

      Well, to be fair, I have to wonder how many of those 56,000 people already displaced american jobs. You know, besides ALL of them.

      So hopefully everyone can pardon me while IDGAF that a bunch of people who got jobs from people laid off to 'reduce costs' are now being cost reductions themselves. Good riddance.

    • Re: (Score:3)

      by Greyfox ( 87712 )
      I've run across two or three people in three decades in the industry who I thought were so bad at what they did that I'd consider them representing themselves as programmers should constitute fraud. They ended up working six months to a year at their companies and left just as it was being determined that they'd produced no working code while they were employed there. Admittedly there were management issues that allowed them to string their respective companies along as long as they had, but a lot of that w

      • You've been lucky. I see that many in every round of interviews.

        Being in Sacramento, we see a lot of former/current state IT employees. We get a particularly bad population of applicants.

      • Hell, our pointy-haired boss outsourced to India, and a few were so bad we had to send them home. That wasn't even as software developers as you could just sit them in the corner and let them chat on skype all day long - better than letting them do anything. No, these got sent home because they were abusive towards anyone they considered beneath therm in status, their attitude towards the female admin staff was so horrible even old pointy realised they had to go.

        mind you the ones we sent work to in India we

      • I've run across two or three people in three decades in the industry who I thought were so bad at what they did that I'd consider them representing themselves as programmers should constitute fraud.

        Found the Microsoft developers who were put in charge of making the Skype interface harder and harder to deal with!

  • Welcome to the party, pal (Score:1)

    by Anonymous Coward

    as spoken by Detective McLane.

    Not to sound unnecessarily harsh, but there are plenty of other movie choices online.

  • Bout time this problem was fixed.

  • Well, there you go. If they laid off several, it must be bad.

    Funny use of "retrenched" IMO.

  • 1% under performing? Really? (Score:5, Interesting)

    by Tangential ( 266113 ) on Wednesday December 27, 2017 @05:50PM (#55818195) Homepage
    Based on my experience with I.T. offshoring in India, I laughed out loud when I read that 1% represents the under performing employees. Perhaps its a nuance of the language and underperforming has no relationship to to good service or solving problems there.

    • Based on my experience with I.T. offshoring in India, I laughed out loud when I read that 1% represents the under performing employees. Perhaps its a nuance of the language and underperforming has no relationship to to good service or solving problems there.

      Goldman Sachs cuts the bottom 5-10% every year, along with lots of others.
      56,000 layoffs in the entire country seems like noise

      • 56,000 layoffs in the entire country seems like noise

        That rather depends on what the trend was before, doesn't it?

        • 56,000 layoffs in the entire country seems like noise

          That rather depends on what the trend was before, doesn't it?

          No. Just the absolute numbers will do.
          According to https://www.statista.com/stati... [statista.com] the direct IT employment is 3.86 million
          56,000/3.86mm == 0.14%

          • Really? What if it went up 500,000 in one year, 600,000 in the next, 850,000 the year after that - and then this year it didn't go up at all, let alone by a million?

  • They heard 56k was being retired... (Score:5, Funny)

    by torkus ( 1133985 ) on Wednesday December 27, 2017 @05:51PM (#55818201)

    But they didn't realize we meant the modems and went ahead with the business plan anyway. Don't worry, next year they will have a new proposal since this one didn't perform completely to expectations.

  • Automation will hit developing and 2nd world (Score:5, Interesting)

    by rsilvergun ( 571051 ) on Wednesday December 27, 2017 @05:57PM (#55818241)
    economies hard. All three articles mention it as the cause. We're at the point where subsistence wages are more than a machine. I think India's government sees this coming and is trying to bring tax dollars in to mitigate it, but I'm guessing it'll be too little, too late. Like America and Japan they've got a culture of overwork. But what do you do when the world doesn't need ditch diggers anymore? If you leave them to rot their join armies and start wars and genocides.

    • Re: (Score:2, Insightful)

      by Seven Spirals ( 4924941 )
      Well, I can tell you there will be a lot of Americans like me who've seen their friends axed over and over by offshoring layoffs who won't give two shits if India and China swap nukes or give each other Ebola etc... When I see that part of the world burning, I'm personally going to take up the violin.

      • Yeah, but that's not what'll happen (Score:5, Interesting)

        by rsilvergun ( 571051 ) on Wednesday December 27, 2017 @07:52PM (#55818863)
        China doesn't have the graineries to feed it's people, and they're not gonna get them from India. Wars are fought to steal valuable land. If China goes to war with anybody it'll be the US. More likey they'll just buy us out. Haven't you heard? The aristocracy is global now. They don't fight among themselves on the national stage. Not over anything important. That's for pleebs like you and me. Now get back to arguing over gun control, abortion and whether White Culture is a thing or if Black Lives matter or whatnot and forget about all those pesky economics...

        • Re: (Score:2)

          by Cederic ( 9623 )

          China doesn't have the graineries to feed it's people, and they're not gonna get them from India.

          Have you seen the Chinese investment in Africa lately? As always the Chinese are several steps ahead of you.

  • They saturated the tech market for companies looking for cheap IT labor and willing to accept all the various compromises that come along with the cheap cost. Considering that globally the tech sector is fine, this is most likely the result of India producing more workers than needed.

  • Paramount Leader Trump's wise policies ... (Score:3)

    by Hal_Porter ( 817932 ) on Wednesday December 27, 2017 @06:03PM (#55818273)

    ... are starting to pay off! IT jobs are coming back to the US of A!

  • Side effects of “America First” (Score:5, Informative)

    by magzteel ( 5013587 ) on Wednesday December 27, 2017 @06:04PM (#55818285)

    Donald Trump’s arrival at the White House earlier this year hasn’t helped.

    Since Trump took office, the fate of the H-1B, a six-year temporary work visa that Indian IT companies heavily depend on, has been hanging fire.

    In March 2017, the US government stalled the premium processing of this visa category.

    The criteria for computer programmers to apply for the H-1B visa became tougher. In April, Trump signed the “Buy American, Hire American” executive order, promising to bring jobs back to the country, putting migrant workers in jeopardy. In November, the judicial committee of the US House of Representatives gave its nod to the Protect and Grow American Jobs Act (titled HR 170) which classifies any company that has more 15% of its workforce working on-site as “visa-dependent.” With this, the pressure is mounting on Indian outsourcing giants which sometimes have over 50% of their manpower working on-site.

    Even the current workers have cause for concern—to clamp down on visa fraud, the United States Customs and Immigration Services (USCIS) plans to double the number of visits to workplaces. “Indian IT companies, thus far champions of IT-based outsourcing, have been forced to go back to the drawing board in order to reposition themselves higher up in the value chain,” Anshul Prakash, a partner at Mumbai-based legal services firm Khaitan & Co, told Quartz.

    • Indian IT, move up the 'value chain'?

      They will get laughed out of the room. PHBs are stupid, but not THAT stupid. I'm pretty sure that in 90% of cases, the PHB knew Indian IT was a terrible idea, but wanted their bonus check.

      Big companies often lose the connection between results/rewards. PHBs game it, shit happens, but they've moved on. Don't read that as 'PHBs don't know', they 'know but don't care'.

      Nobody is looking for 'high priced incompetent Indian IT'. They will get no bonus for signing the co

    • RTFA (Score:4, Informative)

      by rsilvergun ( 571051 ) on Wednesday December 27, 2017 @07:48PM (#55818843)
      the job loses were completely due to automation. Trump had nothing to do with it. He let in a record number of H1-Bs this year and is poised to do it next year. If you were expecting a man who relies as heavily on work visas to make money as he does to champion your the cause of American IT, well, I'm not sure you're going to be disappointed because you're paying so little attention that you can manufacture your own reality as you seem to have already done in your post.

      Sorry to sound so harsh, but folks need to wake up. Trump is not your friend. He is not, never has been and never will be the friend of the working class. He was always a scam artist and a rich man's son.

  • 1%? Whatever metrics they're using are misleading at best. In the "Real World" about 70% of them would be back on the street. Unless they value their employees by the results of their google searches to solve problems.

    More likely 1% of them were making way too much money compared to everyone else, and their employers didn't care about quality.

  • Meanwhile, around 6,000 Indian employees at Cognizant reportedly lost their jobs to automation.

    So are there coding projects staffed by automation?

    Did someone figure out how to make a voice-response system that replied in canned incomprehensible tech-speak?

    • Re: (Score:2)

      by fleabag ( 445654 )

      My experience is that on the operations space, they are being slaughtered by modern DevOps practices.

      A decade ago I was in despair working on live systems with a bunch of offshore people manually hammering in random updates. I literally had a team standing behind the Indian guys telling them to follow the script on updates. We tried to persuade the client to automate it, but they rather liked the idea of hordes of £10 a day people cocking it up.

      These days, DevOps is easy - the tools are all there (

      • Re: (Score:2)

        by Cederic ( 9623 )

        My experience is that on the operations space, they are being slaughtered by modern DevOps practices.

        Not even modern DevOps. It's always been cheaper in India to throw people at a problem than automate it, so they've never bothered.

        Now that people are costing more, they have a myriad of optimisation opportunities. At a guess the biggest outsourcers could chop headcount by 30% in a year just by hitting the low hanging fruit.

        Hmm. I should write to them and offer my services.

  • Dear Trump. I'm not tired of winning yet. Please send another million or so Indians packing. Then we can talk.

  • OffShoreReversal (Score:5, Interesting)

    by sdinfoserv ( 1793266 ) on Wednesday December 27, 2017 @07:42PM (#55818805)
    American companies have finally realized
    1 -their customers detest trying to have a conversation with someone who doesn't speak English - and that Indian is NOT English.
    2- Costs of Indian developers isn't that cheap once you factor administrative, project management and commutation problems within a group on the other side of the planet - again, with people don't understand the cultural nuances of American English speech
    . On the positive, companie can't find enough workers in the US paying great salaries. Ride while you can!
  • More is lost to lower cost nations. Indonesia, Vietnam, China, The Philippines are all ready to offer much lower overall costs to anyone wanting to set up in their nations. Move your entire company over and start saving. Well educated people are ready to work for less.
    Indian owned companies are moving to the lower wages on offer for profit and better support in other parts of the world.
    Why stay in India just for the educated workers? A very small front company can be set up in the USA, UK to handle leg

  • > "Instead of 10 people, what if we have three people to work on (a project). If we don't have the software, then some others will take the advantage (away from us)," Vishal Sikka, the former CEO of the Bengaluru-based company, said in February.

    I'm sorry, I can't parse that. Could someone explain what Mr. Sikka was trying to convey?

  • ...but total percentage is small. Difficult to tell at this point whether this is a trend or only a correction.

    I'd like to think that it's part of a trend in US companies towards outsourcing where it makes sense, not going offshore simply to cut costs. But that would assume that CIOs suddenly looked around and realized that they weren't getting the huge savings the salescreatures told them about. And had the guts to admit it.

  • Comment removed based on user account deletion

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