Layoffs in IT – Why we shouldn’t be crying foul.

I’m not a senior citizen who has seen India changing from an agrarian society to its now globalized form. In fact, I belong to the post-globalization era. I belong to an era where I saw India at the cusp of transformation. I saw ITPL, India’s premier tech park and the symbol of India’s transformation into a global tech hub, as a kid. The road that connected Bangalore to ITPL wasn’t even tarred. I even saw Y2K on TV and thought it was some cool thing.

By the time I finished school I knew much more about Information Technology and how the sector functions. In fact, IT was still in its nascent stages at the turn of the decade. Call centres were booming, so were back-offices. A lot was being written about how companies in America were shifting some of their ‘menial’ jobs to India to cut costs.

I finished my Automobile Engineering graduation in 2011 and entered the very world of IT I always read about. My first job was with Accenture, I had got through in the campus placements – an achievement back then.

As an Automobile Engineering graduate, career options were very few – I could spend my Dad’s money as well as take a hefty loan from banks to pursue higher education in Germany, I could search for a core sector job for years together and eventually start earning ₹15,000 a month as an accident investigation officer in an insurance company or as a supervisor in a vehicle service centre earning half of that amount. I could invest my time in studying and trying out my luck at GATE, GRE, IAS, KAS or do MBA (CAT or no CAT). The best option I saw was to stick to IT.

I chose IT because it paid well. Also because I liked programming. I chose IT because I now understood the business involved and it was both fascinating and funny. When I got the job offer, a far relative who happens to be one of the topmost plywood consultant in India argued that IT is a fad that’ll soon die and that the world cannot survive without the core sector. I argued with him for hours that day, trying to convince him and my father that I had made the right decision by taking up a job in IT and how I don’t see it going down anytime soon. Was I right?

It’s 2017 and everyone is talking of layoffs. There’s a frenzy in the media which doesn’t understand how the industry works. Even if it does, it just likes sensationalizing reports causing more damage to their subjects. Add a pinch of social media frenzy to it, it’s chaos. Everyday, I’m reading reports of layoffs by IT giants including Cognizant, Wipro and Infosys. A friend from Tech M says people who are being taken off projects are being sent home. In fact, I’ve seen people leaving the company I work for, abruptly. And I know it started much before all these things became public last month.

The latest news around layoffs are around the unionizing efforts by some aggreived employees. They are fighting for their rights to stay with their employer. That’s like wanting to be with someone who doesn’t love you. 

Some are calling for transparency in the appraisal process while others are claiming that they were sent home despite doing well at job. The one thing I’m sure about here is that none of these and many of IT employees, unfortunately,  understand the fundamentals of this business.

1) Outsource and offshore: IT employees are concerned about losing jobs that probably wasn’t theirs in the first place! Remember the basics of the IT revolution? Outsource and offshore. You, yes you my friend, the IT employee in India, sitting in your 3 feet wide cubicle in an air conditioned office situated in a swanky glass building of Bengaluru, you actually stole someone else’s job. Someone else who probably was more talented than you, someone who could churn million more lines of code than you in her lifetime lost her job in US or some other developed country because you were ready to take a meagre ₹25,000 per month salary as a fresh graduate. Your company bought you ( remember Infosys being called body shop?) For $8 an hour while it charged the clients $60 an hour. An American programmer would have cost them at least $100 an hour.

The companies gave you cabs ( not a prevalent practice in US except some giants like Microsoft and Google), free trips to US and you earned a bomb there. You could afford D-SLRs, car, your bullets and Thars even before your core sector counterpart could find a firm footing in her field. All this happened because you were a body that was sold for $60 an hour.

2) Unit cost based business: A common argument coming out of aggreived employees as well as some political outfits backing them is that companies enjoyed tax breaks and lower taxes post-breaks because they were creating employment opportunities for the local population. So according to the arguments, laying off people is actually creating unemployment. 

In a way it’s true. But the companies haven’t shut shops right? They are cutting costs. They first took away the free cola vending machine, then removed the coffee machine, then cut down this and that. And now they are probably trimming costs in the only way possible, reduce headcount. 

But then, why do they have to cut costs? Because, they are not getting the business they thought they will. There’s a certain company that hasn’t featured in the news around layoffs – Accenture. It’s a company that moved first in the digital space. It was a slow mover in cloud and had suffered a lot of losses because of that. It took the next opportunity and reorganized itself for the future. Companies are supposed to get rid of inertia and embrace the future if they want to survive. Listed companies are a part of the capitalist economy. They are expected to grow at least linearly. They’ll lose everything otherwise. When they don’t get the orders, they trim costs.

Let’s say I run a garments factory which stitches trousers of mega brands. For the last decade I was able to keep my labour costs low even after providing my employees better than industry standard salaries and bonuses (This is an unheard of thing in the garments industry which reels under its own problems) I have been charging $5 an hour per head to my clients. Yesterday, I learnt that Khadim Baig in Dhaka has set up a factory for the client and is offering $2 an hour. At $2 an hour I won’t break-even in the first place. How will I pay my workers and feed my family? I have to shut shop. But, my workers want me to not slice their jobs evem as I find out about some China made machine that will help me increase production efficiency. The machine stitches pockets and buttons automatically, a job that required 20 people earlier. Shouldn’t I be able to lay the 20 off and keep the rest so that I can continue to survive as an entity? 

3) Staying relevant and Appraisal: I am a C++ programmer. Six years ago, when Java was the in -thing, I was told that I know a niche technology. Android took over Java. In fact, current day technologies have made most of the technologies from 5 years ago obsolete. I feel like a dinosaur already. Let’s say I’m one of the best C++ programmers in my business unit, what if they don’t need a C++ programmer a few months from now? The only way I can survive in the industry is by keeping myself relevant to the business. I have to be among the best at whatever I do and I should be doing at least 2-3 such things at any given point in time. So I can still get fired after getting 3 consecutive best performer ratings, right?

An IT engineer should know these things well apart from his job contract which surely covers the employee layoffs using performance related clauses. The labour department can’t do much. Even if they do, it’d be against the industry’s interests because our labour laws are tailored to suit traditional industries and not the disruptive ones. It’s time people get out of their unionizing socialistic mindsets because it makes no sense in a globalized sector like IT. Having a IT job or any other job is not our birth right. We have to make ourselves employable.

IT is still a net employer and jobs still get created. Campus recruitments are still happening. But, yes, they’re treading with caution. A lot of students will be left unemployed because the quality of students has only gone down in the recent years. 

And to all those who have lost their jobs, I wish you all the best! Devote your energies to seeking jobs in other companies. I know it’s hard, but get comfortable getting uncomfortable. Try a hand at starting-up. Get into education. Pursue a passion. Some of you have kids, try scaling down on expenses. You’ll manage, I’m sure.

As I come to the end of this article, most of you would be surprised and may be questioning my audacity in saying all these things. Folks! I’m just mentally prepared to face whatever it is. I know knowledge won’t go waste, so does experience. I don’t see myself being fired anytime soon, but I’m already treading with caution. I already have backup plans and am sure that I’ll survive the storms. I may have to sell my Thar, but I’ll still have my D-SLR. If nothing, I’ll be clicking your wedding pictures for ₹5,000. The wedding where you’d have initiated some cost cutting, the wedding where I’d be cutting competition’s pricing by, of course, cutting my own costs.

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