IT Act behind lay-offs

Hyderabad: IT professionals point out that the reason behind retrenchments is companies randomly misusing the IT Act to show more headcount. While TCS has started lay-offs globally, IBM, Wipro, HCL and Citrix have also announced global “restructuring” plans. This is likely to trigger a spurt of lay-offs in smaller companies as well, believe insiders.

Interestingly most of the companies that have announced “restructuring” are doing financially well. The requirement for lay-offs  becomes difficult to understand. Companies showing more workforce for projects to get better revenues and doing away with people after keeping them on the bench  is a common tactic, said professionals who participated in a seminar organised by the “Forum for IT Professionals” on the lay-offs issue.

“Companies are bound to give proper explanations and severance package to employees who are retrenched. All companies, which have announced restructuring, are financially sound and this might lead to other companies following suit. TCS has begun lay-offs while IBM, Wipro, HCL and Citrix have announced that they will go for lay-offs too,” said A. Ashish, member of Forum for IT Professionals. As per the IT Act, companies are requ-ired to show a specific number of fresh recruitments to get incentives. Higher head counts also ensure higher client billing.

Citing his example of working with one of the big companies going in for restructuring, a techie,  Harsh, said that the practice of mass recruitments and placing three-four juniors on a project that can be handled by a senior alone, have led to this situation. “I had been on the bench, when suddenly I was taken for a project mid-way as a girl left. I was kept as a shadow resource, which means the client does not know of my existence. Such mismanagement is commonplace to generate more work, instead of work coming from the clients,” he said. Also, while handing out “pink slips,” employees are being branded as poor performers, and this makes them unemployable in other companies for future projects.