Is it fair?

Is layoffs fair?

One of my good friends from India just posted a link to this article. So is it fair to layoff as many as 25.000 employees by TCS, or some 12-15% of the total workforce, within their IT sector and should the government interfere?

Laying off people should, based on my leadership values, always be the last option and instead companies should focus on increased productivity and proper planning to handle ups and downs. Having said so, it may however be required from time to time.

So, what is fair, and what should a company do?

The fact that Mr Suresh supports a family of 5 cannot be the responsibility of the company, but must be the responsibility of the government. While I highly appreciate that companies in India, takes a much larger social responsibility, and while I also acknowledge that losing a job in India may have far more serious consequences than losing a job in Denmark, layoffs may however be a solution to some of the problems being faced.

During some of my previous blogs, I have several times mentioned that I see the personal focus on higher salaries, along with a lower performance some of the biggest risks for the Indian sourcing market. A way to stay attractive as a market is to ensure that cost and performance/efficiency is better than other competing markets, such as Philippines, Ukraine, Poland, Romania and not least the African continent where many customers have started to look towards.

The article mention that unions are not allowed at many companies in India, which may also be the case. During my stay in India I met with one of the larger unions and they actually did confirm that several of the companies do allow unions but in general employees within the IT industry isn’t interested to become a member, as this would mean a larger regulation in salaries across the workforce and less so for the individual

During the past years the market has according to my opinion paid unrealistic yearly salary increases, some 10-11% and at change of job often 30-50%, so is the layoffs now a result of this? Is the layoff due to greedy companies expecting a yearly growth of 30-40%, as has been the case over the past years? Is the layoff a result of customers moving to other markets due to lack of performance, efficiency or quality?

During my time in India, I often discussed situations, with my fellow colleagues within the industry, where we as customers terminated a certain consultant but for some reason the company kept the consultant as an overhead cost. Talk about frustrated customers. I also experienced employees leaving because they didn’t get the expected increase, leaving the company in a situation where we couldn’t deliver as committed, so what is fair?

The article also mention that senior people may be faced with a hard time to find a new job. I often joked that I was the only one in the office with grey hair, but in reality, it was much more serious than just a joke as it also meant that market such as Denmark had a much higher level of experience. Asking why it is so it may unfortunately be because senior employees often cost 2-3 times that of a junior.

I cannot judge if the layoffs are fair or not, I only have one side of the story, I cannot judge if it is the right or wrong people being laid off, I don’t know their performance. I do hope that TCS, and other companies, do the layoff due to valid reasons and not least that they do it with respect for the individual and provide the support required for the individual to get a new job somewhere else.

I for sure still see India as a market with a lot more potential. I for sure see employees in India as skilled and competent. I for sure understand how the individuals fight to get a better life and take care of their families. I for sure understand how it is to be unemployed, have unfortunately tried it myself. I for sure hope, that each and every one will be able to get a new job but I also see this as a sign of a new time that may face the growing market in India, a sign that should be taken very seriously by all and not just by the Companies

During the past 3 years, I have established a company in India, captive IT center, on behalf of a large Danish bank, while also heading a 850+ resource sourcing setup. I am now back in Denmark, working for a small start-up company, CodeSealer, delivering web-session security solutions to banks, public and corporate institutions. Over the past, I have been a guest speaker and interviewed numerous times about my experiences, experiences that I will continue to share, and hope you find useful. Before India I have lived and worked in countries such as US, FR and DE, and have headed project across the globe for companies such as SAS and Star Alliance.

For more information, please check out my CV at dk.linkedin.com/in/tonnyrabjerg/.

All comments, proposals and opinions expressed are personal and may not represent those of the companies for which I have worked, but are solely based on my own experiences in India and other countries in which I have lived and worked