In the last few days, those in India’s technology industry would have come across reports of a massive layoff in India’s largest IT services company, namely, Tata Consultancy Services (TCS). While several of these reports were unconfirmed and unverified, many in the field have already expressed their support for the “victims” of this layoff. Interestingly, there are some organizations like the Chennai-based Forum for IT Employees (FITE) that are organizing a resistance to the retrenchment at TCS. Some of my friends, in fact, have invited me to like the Facebook page of this forum, and updated their status and profile pictures with a call to stop TCS layoff (like the one shown in the image below). I wonder if they have really taken an effort to understand the situation before being alarmed by it. If these developments can be attributed to the empathy of IT employees at large, and an attempt of isolated individuals to fish in troubled waters, a more real threat to the industry is that larger trade unions that are affiliated to political parties and have a reputation of orchestrating the downfall of many an organization are also trying to use this as an opportunity to gain a foothold in this sector that has hitherto been off-bounds for them. I have always been against unionization – in almost all industries, and more so in IT – and this post is an effort in explaining that position and encouraging fence-sitters to jump to this side of the great divide.
The very first point that I want to put forward for the consideration of those who are thinking of an “organized resistance to layoff” based on reports (or rumours, to be precise) of as many as 25000 employees being laid off by TCS is the (lack of) veracity of these reports. Since the officially confirmed number given by TCS is only at three to four thousand, which is as low as one percent of its 3.5 lakh workforce, it needs to be pondered as to who is benefiting by misrepresenting the figures, thereby creating feelings of fear and insecurity among employees of TCS as well as other companies. In my opinion, these malicious elements and the fear they have already succeeded in creating are the real enemies of IT fraternity. So, at the very least, I would urge that before we swing our sword at what we have been told is a poisonous snake, it will be good to confirm that the object of our strike is not the rope that restrains a ferocious beast that is even more dangerous than the hypothetical snake!
The next consideration would be the legality of layoff. Most companies specify, along with the terms of employment, the rules for employee termination. This is part of the contract that the employee makes with his employer and is usually bi-directional. Typically, it would state that either the employee or the employer can give the other party a month’s notice to part ways. As long as the employee uses this provision to his advantage, to find and move to jobs that pay better and advance their career further, nobody complains. Why then, should we make a hue when the company uses this provision to replace employees who are not bringing in sufficient value with new ones who might be able to contribute better? Moreover, for every employee retrenched, the company would be hiring another more deserving candidate or, in some cases, multiple candidates with lesser experience. So this move makes way for giving opportunity to more number of more deserving professionals. I don’t think it is unethical, much less illegal, for a company to restructure its workforce in this way.
The IT industry in India, in striking contrast to its public sector where caste or community (institutionalized through reservations) is a major factor in recruitment and promotions, has so far been merit and performance oriented. The top performers are usually rewarded with better pay and greater responsibilities, enabling them to take up roles that make best use of their experience as well as bring in sufficient value to justify their paycheck. Under-performers, on the other hand, stagnate at junior roles but, nevertheless, improve their salary over time (either via regular yearly increments or by switching jobs) to a point where it is easy to replace them with a person of much lesser experience at a fraction of the cost. If they are not thus replaced, the cost of keeping them in the company has to be borne by those who are working hard and smart to ensure a net positive revenue, which I think is an unfair expectation. Worse still, if the company’s performance is affected as a result of preventing it from making itself more efficient, or if the company decides to move its operations to more business-friendly locations, then all employees will have to bear the brunt. The trade unions, of course, have nothing to lose, when their most bragged about victories are in closing down organizations that they dub “anti-employee”, rendering hundreds or thousands or people jobless! It would be wise for the educated and well-informed members of IT fraternity to resist falling into this trap as it has been doing so far.
My intention here is not to insult or laugh at the tragedy of the those who have lost their jobs. I understand that they are passing through a difficult phase and need support. With the right effort, I hope they will be able to find a position in which they can make themselves useful. My effort is only to point out the foolishness of the way in which some are responding to this unfortunate reality. I also agree that not all who lose their job deserved it through their lack of effort or ability; there are also those victims of circumstances, of the constantly changing needs of the technology industry, and of other factors. But, in general, I believe that if one cannot earn his place in a knowledge economy by merit, and has to resort to strong-arm tactics, he probably doesn’t deserve to be there. The best way to defend against layoff, in my opinion, is not the crooked way of intimidation (the way of trade unions), but the straight-forward way of making oneself valuable and irreplaceable. As Joe tells Pip in Great Expectations, “If you can’t get to be oncommon through going straight, you’ll never get to do it through going crooked”. The same holds for keeping your job.
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Raman,
I totally agree with your larger point on Unionization in any industry only hurting the prospects of employment..I have never understood the merits of Unionization in-spite of experiencing them at one of my work places..
I think it's a result of typical socialist thought process where a select few, under the garb of of 'protecting a group from exploitation of management' ending up coming in the way of the company's and thereby employees' progress and well being..
A couple of points I slightly differ with, though they are trivial points in the bigger debate
1) Going by the officially confirmed number for layoffs may not always be correct…as you know, most layoffs are regularized via the 'resignation' mode and hence the line between actual resignations and layoffs will be very blurred..I've personally seen layoffs in a company where a good lot of them came out as resignations…
Also, it hurts company's image if the percentage of laid off employees is high as people will start doubting their recruitment strategy and potential employees might stay away..
2) 'Moreover, for every employee retrenched, the company would be hiring another more deserving candidate or, in some cases, multiple candidates with lesser experience..'
I'm not sure of IT Industry, but in Manufacturing, this is not always the case..layoffs, most often, happen for cost-cutting and replacing a laid off employee with a new one beats the cost-reduction logic..
Between, very well articulated piece ! Kudos !
Hari, thank you for a comment that complements and enriches the post. I agree with your points. The official number may not be very accurate, but in this case if the official figures are 3-4k, I don't think the actual can be as high as 25k! On the second point, yes, the discussion here is probably more in an IT context. In case of a layoff that accompanies recession, new opportunities are not usually created. But in that case also, the employer doesn't really have much of a choice.