Just as the appraisal cycle is coming to a close, another IT giant Wipro is reported to have fired nearly 600 employees. This comes just days ahead of it reporting its Q4 and FY17 financial results. There are reports that suggest that this number could be as high as 2,000.
Wipro however has said that this is only a part of its performance appraisal. In a response to The News Minuteâ€™s query, Wipro said, "Wipro undertakes a rigorous performance appraisal process on a regular basis to align its workforce with the business objectives, strategic priorities of the organization, and requirements of our clients. This systematic and comprehensive performance evaluation process triggers a series of actions such as mentoring, retraining and upskilling.â€ť
But Wipro has not revealed how many employees have actually been let go. â€śThe performance appraisal may also lead to the separation of some employees from the company and these numbers vary from year to year,â€ť it said in its response.
Wipro is not the first to fire employees en masse in the past few months. In January this year, there were reports that Infosys let go nearly 9,000 employees due to automation. Cognizant too, was rumoured to be firing between 6,000-10,000 employees as part of its appraisal process.
The IT industry has been seeing a slowdown in past few years. Tata Consultancy Services (TCS), the first IT company to report its earnings for the fourth Quarter of FY17, reported only 1% quarter-on-quarter revenue growth, which was below estimates.
Also, this was the first time Nasscom did not give its yearly guidance for the IT industry. There is also a major shift happening in the IT industry towards digital. This is resulting in a number of low-level jobs being lost due to automation.
Stringent Visa issues are also another issue thatâ€™s been plaguing the IT industry. Most It majors get more than half of their revenues from foreign markets like North America. And with Donald Trumpâ€™s government proposing stricter H1-B visa laws, operational costs for IT majors are set to significantly go up. Alternatively, these companies may look at hiring locally in these foreign markets, which will be a blow to the large outsourcing market that India is.
Image: Gabriela Avram