[India] Lockdown Pay Cuts And Job Losses Hit IT And BPO Sectors Hard

11 JUN 2020

Industry sources told the publication that hundreds of workers are being asked to take unpaid leaves until July, or worse, lose their jobs entirely. The risk is reportedly higher for those employees not currently handling any projects. An employee of Cognizant Technology Solutions was asked leave on May 22, after eight years of service, he spoke to The New Indian Express about his experience. 

“They gave me two options; either take a severance pay equal to my three-month salary and leave or wait for one month on the bench for new projects. The catch is that if we do not get any new projects in that one month, I will have to leave without a compensation. They did not give me much time to think it through. I had to make up my mind by May 31.”

The employee ultimately decided to take the money and leave. “When I went to the Thoraipakkam office to handover my equipment, I was told that 700 other employees were asked to resign in similar fashion, all between May 31 and June 2. The actual number could be much higher,” he claims. 

Losing a job in these uncertain times is hard enough but a few companies have compounded this by refusing to pay outstanding salaries. 

Hexaware Technologies has given a verbal notification to its benched employees to warn that they will not be paid for May, June, and July. Those who are not working on active projects after July will be terminated.

“We were informed about this over phone in the first week of April. Many of us received the May salary, but some are being asked to quit immediately,” an associate consultant told The New Indian Express. Though many of these actions violate labour laws, the practices continue. (Quote via original reporting)

As early as March 29 the Central government issued strict orders for all employers to pay wages to workers without any deduction for the lockdown period when their business was closed down.

Despite the order and despite most tech employees continuing to work from home during the lockdown the issue of non-payment of salaries has come up. 

The Secretary of Labour & Employment wrote to chief secretaries of all States to advise employers that they may not terminate employees or reduce their wages during the pandemic. The IT industry has been largely unaffected by the lockdown, compared to other sectors, some companies have actually registered an increase in productivity. 

Shreeranganath Kulkarni - Chief Delivery Officer for Birlasoft - said, “We have been able to meet all milestones and service levels, with 96 per cent of our employees in WfH mode.” (Quote via original reporting)

Aditya Narayan Mishra - Director and CEO of CIEL HR - says Chennai is the worst-performing city in terms of recovery, it has experienced a 70 per cent slump.

“As the lockdown is being relaxed and businesses are resuming, other metros have shown some recovery including Mumbai, which is worst affected by coronavirus. But, Chennai is not showing great progress in terms of recruitment, the reason being its overdependence on auto, manufacturing and IT service sectors. It would take at least another 4-5 months for normalcy to return.” 

Source: The New Indian Express