Crisis in India’s IT sector amid mass layoffs

“In the last six months, I got more grey hair than I had in the last five years,” said an IT engineer who asked to go by the pseudonym Pankaj, fearing he would lose potential opportunities in the IT market if he revealed his identity.
“I live and breathe mental tension. What I see in front of me is just darkness, no light at the end of the tunnel,” he told Arab News, almost sobbing.
The 46-year-old was forced to resign from one of the top IT companies in the western Indian city of Pune in February after working there for six years.
He headed a team of six people, and was labeled a “high performer” for five consecutive years.
It was a comfortable life, and he was planning to buy a high-end car at the end of the year after his promotion.
But his 20-year career in IT and his dream came crashing down when in mid-February, he was asked to resign with immediate effect. He resisted for a few days but could not hold out for long. He has been jobless since.
Thousands of IT professionals in India are facing the same existential crisis. Most are middle-aged men and women.
An IT engineer who asked to be called Anil said he was suddenly removed from a project and asked to leave.
“It’s unethical and criminal to lay me off without giving me any explanation,” the 36-year-old, who has 15 years’ experience working in Europe and America, told Arab News.
“I still don’t understand what my fault was, where I erred. The company is performing well, so why this sudden removal?
This question is troubling many in Pune, Bangalore, Hyderabad and Chennai, the major IT hubs in India.
On Saturday, more than 100 professionals gathered at a lawyer’s house in Pune to seek legal remedy.
For them, this is the last resort as they got nowhere with the government or with top management in the IT industry.
The workers came together and formed the Forum for IT Employees (FITE) in various cities in India.
Every weekend, the group meets and chalks out a strategy to fight its cases. The group consists of employees from almost all the IT companies, big and small.
They do not want their identities revealed or their activities to be noticed by IT companies, fearing the loss of job prospects.
FITE also attracts those who are still employed. “I haven’t received any notice from my company, but I’m really worried with the way things are moving in the industry,” Dheeraj, 31, told Arab News.
“What I hear is that there’s a list in every IT company. Hundreds and thousands are being forced to resign in the name of cost-cutting and automation.”
This fear claimed the life of a young IT professional in Pune last month. He jumped from a terrace, and his suicide note read: “In IT there’s no job security. I’m worried a lot about my family.”
Industry watchers say in the last year, at least 100,000 people from different parts of the country have lost their jobs.
“There are 600,000 jobs that are at stake in the IT sector today,” Elavarasan Raja, one of the main coordinators of FITE, told Arab News.
“We’re getting more and more calls every day related to forced resignations and terminations from different parts of the country.”
He said companies are not listening to anyone, and “it’s high time the government intervenes before the crisis goes completely out of control.”
When asked about the reason for this crisis, Raja said: “It’s the greed and cost-cutting that drive the IT sector to take this kind of inhumane step.”
He also blames US President Donald Trump’s protectionist measures and restrictions in giving H1B visas to Indians.
“If Trump can make rules that benefit his own citizens, what’s our government doing to protect the interest of the Indian people?” Raja asked.
Economist Arun Kumar told Arab News that the Indian government is not in a position to do much.
“The IT industry is a specific case where external demand is a problem,” said Kumar, who teaches in New Delhi’s premier educational institute, Jawaharlal Nehru University (JNU).
“Protectionist measures adopted by some governments in the West have impacted the industry here. The Indian economy isn’t creating enough jobs.”
An economic survey released by the government last week cited rising protectionism, restrictive trade measures and risks in people’s mobility as concerns for India’s exports and economy.
The website of New Delhi Television (NDTV) quoted Arvind Subramanian, Prime Minister Narendra Modi’s top economic adviser, as saying: “Indian service companies gained scale over the last decade as the disrupters, creating the modern offshoring industry, but they are now the incumbents, challenged by a slew of specialized and niche start-ups bred in this new environment.”
The website added that Subramanian expressed concern that growing anti-globalization tendencies, expressed in the last US election and in Brexit, threaten Indian jobs.
Bangalore-based analyst Deepak Kumar said the market situation is responsible for the crisis in the IT industry.
The founder of company B&M Next told Arab News: “The economy runs on demand and supply. Demand for services generated by Indian IT service providers has come down, so there isn’t much need for the supply of people. The present situation reflects that reality.”
Some economists believe the IT sector’s contribution to India’s economy is hyped. Dhanmanjari Sathe of Pune University told Arab News that the crisis is “a blessing in disguise,” adding: “Finally, we may start thinking that it’s in the manufacturing sector where India’s natural strength lies.”
According to the Indian Brand and Equity Foundation, a trust established by the Ministry of Commerce and Industry, the IT industry employs about 10 million people.
The National Association of Software and Services Companies (NASSCOM) said the IT sector’s contribution constitutes 7 percent of India’s gross domestic product (GDP) growth rate.
India’s IT industry is at a crossroad, as is Pankaj. It is a question of survival for both of them. “For me it’s a desperate situation,” he said.
“I have housing and car loans to pay, besides taking care of two kids. How will I manage all this?”