Is lay off really required in IT industry?

We have been hearing a lot about high amount of pink slips being given in IT industry right now. All of it started with the news of laying off by a company that was considered a haven among IT professionals as it didn’t give pink slips during the 2008 crisis. And soon other big companies followed the suit.

They have made us believe that lay offs are inevitable as the business is slowing down because of automation and change in policies of various countries. According to me this is neither wrong not right. The truth lies somewhere in between.

There is also nothing hidden that the majority of Indian IT industry work on the services model and due to the cut throat competition they have been slashing the bidding price regularly and in this race of lowering the price and ensuring a higher growth than the previous year, a normal IT employee is being grinded.

An employee these days is being asked by these companies to learn more technologies and start doing work of more than one people if they want to succeed. Well there is nothing wrong in this notion because if you want to succeed then you have to showcase something more if all others are just like you. After all, change is the only constant in this technology driven time period.

But in this “change is the only constant” period it appears companies are forgetting about one thing that a person looks for after devoting a long period of their life. Stability and Peace of mind. Among the people having a decade of experience there is a fear that they might be next in the lay off round because their salary is high as compared to people who are just entering the industry.

Even IT companies are at loss in the long run with the current trend. They are losing talented resources from the new generation because they are giving an impression of zero job security as a person is given pink slip as soon as the project is over. Most of the companies only give 1-2 months to find a project and then there are a few companies that have started following the rule of find project in 15-20 days or else leave. These companies are not ready to give genuine time of finding a new  project and are not even ready to give time for re-skilling.

After a friend recently got a new job in one of these firms, it was a little shocking to me that they were not able to find talent in their existing resource pool which they recently laid off and had to hire an outside person. Though he is really good at what he does but I don’t think that that friend of mine has that niche skill(s)  that his new employer wouldn’t have found in their existing employees that they laid off. This just shows that they wanted to bring down the cost as he is relatively new to the industry with not very high  expectation of salary.

And with the advent of big data, machine learning, cloud and other hot technologies in which these companies are trying to enter I am unable to understand how they will attract new talent with the required skills if they are not able to give a sense of job security to the prospective employees.

Then there is a highly unethical practice of showing a person who is just starting his career as a talented and experienced resource to the client and charge higher then what it should have been. As clients learn of this practice then they will obviously take back their project and may even put a heavy fine on the company for the fraudulent behaviour and then again their profit will get affected and who will bear this burn is the middle amd lower level employees in the form of lay offs and no promotions.

I won’t say that these companies are doing lay offs just to bring down the costs. It may be necessary with the change in technologies and changing policies of countries from where they were getting projects but it could have been done in much better way where a person was given a genuine chance of getting a new project and re-skilling if required be instead of laying them off immediately and then hiring a new person a few weeks or a months later. This will only help the companies as they will be able to lure new generation just like a decade ago and not lose its charm which is actually happening on a daily basis.


2 thoughts on “Is lay off really required in IT industry?

  1. Ok, so first of all, I’d like to say that it’s very well written blog.
    I agree with you in all the points…,
    I am a 3rd year Engineering student.
    But sir, I think there might be one problem.
    See, companies have to lay the employees off immediately…instead of giving them time to learn new technologies….because, they don’t have time to give to employees to learn as the client May Retreat his project…
    This is why I think there is always a chance of lay off….no matter you are placed in Google or Facebook…..

    Haven’t you heard the joke, A man says,”Mom, I’m the new CEO of Google”,
    And the mom says, “it’s not a government job , So, I am not flattered”. 😀

    In the long run, yes, the companies are facing the lack of talented resources too…..because, many graduates, after their engineering turns to govt. Jobs. Instead of it jobs . Simply because of the same reason.!


    1. Hi Abhinav, I agree lay-off is an inevitable part which every company has to face at some point of time. But they can be handle it in much better way. They should not deal with lay-off as if it is a routine work at office, take the latest example of Tech Mahindra.
      Most of the companies are having forecasts from revenue to that human resource requirements. I believe they should have taken the appropriate steps at appropriate time.


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