UNITE claims that IT companies are not making any loss, and hence the move to retrench so many employees is to maximise profits.

IT employee union opposes Cognizants layoff announcement calls it unjustifiedImage Credit: Picxy.com/munna
Money IT Thursday, October 31, 2019 - 19:14

After Cognizant announced on Thursday that it would be laying off around 7000 employees globally, Chennai-based Union of IT and ITES employees (UNITE) has opposed the move by the company, calling it a ‘motive for profit-maximization ignoring the life of its employees and their family’.

UNITE alleges that IT companies are not making any loss, and hence the move to retrench such a large number of employees is purely to maximise profits.

On Thursday, Cognizant said that as part of its cost reduction plan, it will be removing 10,000-12,000 mid-to-senior level associates globally from their current roles. Of this 5000 will be re-skilled and redeployed and nearly 7000 stand to lose their jobs over the coming quarters.

“This happens in IT companies every two years where they do a rationalisation exercise and end up sacking employees whose salaries are higher. Cognizant has now openly said 7000 people will be laid off. More than 50% of their workforce is from India. We are expecting that nearly 4,500-6000 people from India itself will be retrenched,” Bharanidharan, President of UNITE told TNM.

UNITE expects the impact of the retrenchment to be severe in India as well and has called upon employees to unite and fight.

Cognizant has over two lakh employees in India and is the second largest IT employer after TCS.

UNITE has also called for provision of health benefits for the 12,000 employees that stand to be re-skilled or laid off as part of Cognizant’s ‘2020 Fit for Growth Plan’.

“All those who will be losing jobs may be married, with kids and families to feed. If they suddenly lose their jobs, or removed from their roles, they will undergo mental stress and agony. So we want the company to use funds from its 2020 Fit for Growth Plan to offer some consultation and counselling services to those will be sacked or re-skilled,” Bharanidharan said.

In its letter, UNITE has also drawn attention to the company’s Content Moderation business, which saw the death of an employee, revealing harsh working conditions, unreasonable targets and long work hours.

“UNITE calls upon the employees of Cognizant to take note of HCL, Pittsburgh, employees forming a union to fight for their job security, better working conditions and better financial compensation. The HCL employees were employed for Google's Content Moderation,” it said in a statement.

The cost reduction plan also involves exiting certain content work in the digital operations practice over the course of 2020. This will be the work that is done within the company’s digital operations service line. Exiting this business, the CEO of Cognizant said, will impact approximately 6,000 roles worldwide. However, Cognizant will work with its partners to move these employees to alternate vendors, to reduce the impact.

For the third quarter ended September, Cognizant posted a net profit of $497 million as against a profit of $477 million last year. Its revenues were up 4.5% to $4.25 billion. The IT major also raised its revenue growth guidance for the full year to 4.6-4.9% in constant currency, up from the previous guidance of 3.9-4.9%.

However, UNITE has not yet reached out directly to Cognizant. The current statement, it said is a reaction to media reports on the layoffs that are set to happen. It intends to take up the issue with Cognizant once employees begin receiving notices from the company.

Also read: Cognizant to lay off nearly 7,000 employees as it looks to cut costs

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