Mass Layoffs In Tech Sector: Why Are India-Based Companies Aping The Worst Practices Of US Industry?

There is a buzzword that management graduates holding executive positions in industry tend to overuse: ‘Best Practice’ — understood to mean a set of guidelines, ethics or techniques that is widely accepted as the most efficient alternative in a given business scenario for producing superior results.

Managers tend to flaunt their own best practices vis-a-vis the competition, when wooing potential clients.

In process-driven sectors of the infotech industry, where competition is fierce, players study their rivals to see if there is some sliver of advantage they can get, for enlarging their slice of the business.

All good tactics so far: but a management which has confidence in its own system will not change or tweak it, just because the other guy works differently.

Sadly, that is what is happening in the India-based information technology industry today, which is facing severe financial pressure and is having to  downsize its workforce in order to remain profitable.

This is consistent with what is going on globally particularly in the US, where many Indian companies have the bulk of their business or the headquarters of their principals, if they happen to be multinational corporations (MNCs).

‘Parting is such sweet sorrow’ did someone say? Maybe in a Shakespearean tragic-romance, but not in the harsh reality of the naukri ka maidan.   

They can cloak it in humbug lingo and call it ‘downsizing’, ‘resizing’, ‘de-cruiting’, ‘providing career alternatives’ or ‘letting you go’ or ‘freeing you up for the future’ — the last sounds as if they are doing the employee a huge favour. But it amounts to one thing only: the sack.

Graceful Yesteryear

Companies with India in their DNA, used to do this with some grace. Even those which were mere India outposts of some global player, had the spine to follow the traditional practices on how to gently break it to an employee that he or she had to go.

There were things like a face-to-face meeting with one’s superior and with a member of the human resources department, followed by a formal letter, a notice period of at least one month and a computation of what the employee would get as the ‘full and final settlement’.

I know of many Indian-origin companies where the notice period was three months, allowing enough time for the employee to find a new job and relocate if required.

Adopting Imported 'Worst Practices'

All this reads like a fairy tale today, when thousands of Indians, working in the tech sector, here or abroad are being fired wholesale.

And the companies based in India are adopting not their own best practices when it comes to layoffs — but the worst practices that have been perfected in the US, which has the dubious distinction of having one of the most anti-worker labour laws in the world.

Most notorious is the outrageous arrangement known as ‘at-will’ — nearly three of four workers in the US, are forced to work under this employment regime where they can be legally terminated at any time, without warning and without the employer having to disclose just cause for doing so.  

No wonder the favourite catchphrase in American business is “You’re fired” — made notorious by former President Donald Trump in the reality TV show “The Apprentice” that he anchored for 14 seasons till 2017.

The manner of firing an employee has degenerated to abysmal levels in the last decade or so. 

When emails became common, employers were saved the bother of signing a personal letter — and a mailed letter of termination became common in the first decade of this century — saving managers the embarrassment of having to break the news personally.

When in December 2021, Vishal Garg the US-based Indian-origin CEO of Better.com, fired 900 of his employees in India and the US, via a Zoom conference call, there were yelps of outrage. But at least he showed his face to his employees while breaking the news. (Swarajya report here).

That seems almost touching in comparison to the manner in which tech biggies like Google, Meta ( Facebook), Twitter, HP, Microsoft, Accenture and others are laying off employees wholesale. 

From 1 January to this week, some 500 companies mostly in the tech sector have fired over 1.5 lakh employees worldwide according to the tech layoffs tracker Layoff.fyi.  

Some 60,000 – 70,000 thousand of those sent packing in the US alone, are known to be Indians. The numbers in India are much smaller — but their experience is no less traumatic.

Company Access Denied

Google has been sending emails titled “Notice regarding your employment” to some 12,000 employees worldwide — often hitting inboxes in the middle of the night. 

Across businesses in recent days, thousands of employees, many based in India getting ready to log in for an early morning conference call, found that access to the company system was locked. 

Indeed, having an employee’s mail and messaging credentials denied has been this year’s chosen method of termination.

Meta CEO Mark Zuckerberg wrote a “message to Meta employees” that is typical of the style that US companies have perfected, with bogus soft balls: ‘difficult changes’, ‘leaner, more efficient company’, ‘cutting discretionary spending’.  

“There is no good way to do a layoff”, he laments. Yes Sir, there is, though clearly your company is ignorant of such niceties.

Employees of Twitter, which was bought out by Elon Musk last year, have  had more than their fair share of boorish corporate behaviour. 

Once Musk even posted a photo of his dog, Floki, sitting in the CEO’s chair with the caption “The new CEO of Twitter is amazing”, adding “So much better than the other guy”, a remark that most readers assumed referred to the previous CEO, Indian-origin Parag Agrawal.

Musk’s status with US media ensures that he can get away with things like that — but what about CEOs in India?

‘Quiet Firing’

Going by social media posts of sacked Indians, there is another American corporate finesse for firing, that their Indian counterparts seem to be embracing. It’s called Quiet Firing.  

Forbes magazine described the technique like this:

“Deliberately excluding an employee from an important meeting or project, failing to give them any meaningful feedback, or passing them over for a pay rise or promotion — these are just a few of the ‘quiet firing’ tactics managers use to create a hostile environment and force employees to quit.

Such an approach can be demoralising for the individual and contribute to a toxic work culture — and it is happening more and more.”

This bit of ‘best practice’ has seemingly been imported to India — going by some anguished postings in social media by tech employees with 4-5 years seniority, in companies who find that a fresh recruit for the same work is offered equal or higher pay, causing internal disharmony, even resignations.

Silence Of The Lions

The India heads of MNCs have mostly ducked their heads and made no media comment, professed no explanation, about the people they have sacked in this country.

But that is par for the course for so-called “country”- or “ SAARC”-presidents who in any case, rarely have had the freedom to put out even a routine press release no matter how innocuous, without getting clearance from some mid-level functionary in the parent company.

And what of our made-in-India tech icons, which our media keeps calling ’bellwethers’ — TCS, Wipro, Infosys, HCL to name just the top companies?  

Has any CEO or Chairperson offered any explanation outside of their AGMs for why they are letting go so many of their loyal staff, many who gave 10-15 years to the company?

Has there been any public statement that might help lay Indians, let alone their own staff, understand the compulsions of the industry?  

If they want to understand the angst of their laid-off staff, they should read some of the comments and laments published at the portal Desi Q&A, which, from being a clearing house of jobs news, has become a sort of agony column of the affected.

Anger and disappointment at the massive layoffs was softened to some extent, when US-based CEOs of companies like Intel, Apple and Google  took voluntary pay cuts in recent months.

This is one ‘best practice’ that seems not to have trickled to India:

“Senior executives and CEOs in India are seeing an almost 9.1 per cent rise in average salaries this year…The average salary of a CEO is now Rs 8.4 crore, almost a 21 per cent hike in the last four years, including the turbulent pandemic times,” says an article in Qrius (formerly ‘The Indian Economist’).

The headline expresses it best: “As global CEOs take pay cuts amid mass layoffs, why are Indian CEOs getting a raise?”

Why indeed!