As CTS announces layoff, IT Employees organisations come together

Three IT employees’ unions have come together to resist impending layoffs announced by IT Multinational Cognizant Technology Solutions (CTS). FITE, Knowledge Professionals Forum and NDLF IT Employees Wing conducted a leafleting campaign at various IT parks in Chennai on 5th and 6th of April.

As hundreds of employees left offices in Tidal Park on Old Mahabalipuram Road, activists distributed pamphlets urging them to oppose “forced resignations and illegal retrenchment.” Like Tata Consultancy Services did two years ago, CTS has announced that it is likely to cut 10,000 jobs this year.

In this analysis by Business Standard, one of the major reasons behind this move is the result of an agreement signed with one of its investors, Elliot Management. The agreement aimed to

boost its non-GAAP operating margins from 19.5 per cent in 2016 to 22 per cent by 2019 by streamlining costs, improving operational efficiency and aggressively employing automation to optimise traditional services.

Given this push, the company is likely to downsize by letting go of almost 2.5% of their workforce.

A group of women employees, who have joined the company a month ago, said that they were still in their training period and heard about the lay-offs. “Our seniors have said that only the low performers are being laid off. Based on performance in each project, there will be a bucket rating of 1,2,3 and 4. Only those in the 4th bucket will be laid off”, they said. The women say that they came into the IT field knowing that there is no job security and can only hope for the best.

The employees are echoing the oft repeated justification of managements for mass terminations. Back in 2014, when Tata Consultancy Services moved to lay off workers (industry experts estimated 25000), they said it was merely involuntary attrition of non-performing employees. However, a fact-finding team  concluded that the move is not routine but “a carefully crafted and implemented strategy to reduce its mid-tier technical employees.”

The TCS Layoff brought forth the need for collective organising to resist IT industry service conditions. Several organizations started voicing and organising IT workers. Vinodh from Forum for IT Employees (FITE) said that there is a concerted effort from the management to induvidualise worker’s issues. “When they need us to meet targets, they say team work but if there is a grievance, it is an individual issue. This is a form of psychological training given to everyone beginning from the orientation”, he said. The freshers at CTS confirmed this when they said that they signed an agreement which requires them not to discuss their salary or other benefits with colleagues .

According to another IT employee, who worked with CTS and has more than 5 years of experience in the industry, many of his ex-colleagues were nervous and one of them was sacked. “The manager just calls him and says we are not happy with your performance; you will have to leave in one month. There is no scope for negotiation or talk. We do not know what to do”, he said. At present, he earns Rs.7 lakhs approximately per annum but says that the salaries in CTS have taken a beating as the variable component, which usually constitutes a large part of the salary and is linked to performance, has reduced.

Welkin, President of Knowledge Professionals Forum, raises another important issue. He says that given the rapid changes and advancement in technology, companies have a valid excuse to terminate employees by saying they have become redundant. “It is the employer who recruits mechanical engineering and ECE graduates claiming that they can be trained to work, but years later they will say that the same employee is unskilled. We feel that re-skilling is a crucial issue and that this should be the management’s responsibility as they can do it at a lower cost with their resources”, he said. KPF runs an initiative called the Tech Corridor where IT workers are charged nominal fees for classes on new technologies and processes.

The way forward…

Most employees that Thozhilalar Koodam spoke, to said that they needed a union to represent their issues particularly when there is a problem, but did not know where to go. In the past, the management has dissuaded employees from becoming unionised . There is an unspoken threat of being black listed . There has been also maligning union (as an institution) itself though it is indeed a fundamental right.

Last year, when NDLF filed a PIL in the Madras High Court, the Principal Secretary of the Labour Department clarified that IT employees were free to join trade unions as well as seek redressal under the Industrial Disputes Act. FITE has several cases pending before Labour Courts on illegal termination and will explore similar options in case of CTS layoffs. They are also hopeful that a sustained public campaign will force the government and the management to intervene.

With the coming together of these three organisations, the larger effort has been to create awareness among IT employees about their rights. KPF which started in Mahindra City SEZ, Marai Malai Nagar and Chennai suburbs has expanded its activities. They are hoping to use the social media to raise awareness about the rights and not merely view lay-offs as a “corporate tendency”.

FITE plans to submit petitions to Labour Ministers and IT Ministers in other states as the lay-offs are likely to happen in other cities as well. Given that there is already a presence of unions in Chennai, FITE feels that most of the terminations are taking place in other cities – Coimbatore, Pune, Kolkatta and Delhi and is working towards creating solidarity at the national level.




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