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'Re-skilling, not axeing': IBM rebuts reports of firing 5,000 staff

17 May 2017

US-based technology giant IBM today clarified that the company was not firing 5,000 employees in India, and media reports to this effect were factually incorrect.

It was widely reported on Tuesday that the company was laying off 5,000 employees in India, in line with IT services firms like Infosys, Wipro, Tech Mahindra and Cognizant, as the IT sector faces technology shifts towards automation and cloud as well as visa curbs in major markets, especially the US.

'Big Blue', as computer pioneer IBM was often called in its glory days, said that it was continuing to re-skill and rebalance its employee workforce.

 ''This is factually incorrect. We are not going to comment further on rumours and speculation. Re-skilling and rebalancing is an ongoing process as we accelerate the benefits of cognitive and cloud technologies for clients around the world,'' a spokesperson for IBM said in an email.

The other IT firms too have all claimed the lay-offs are routine and performance-based, though the scale of lay-offs has not been witnessed since the economic meltdown of 2008.

IBM India has an estimated employee strength of 1.5 lakh.

IBM India was looking at a target of "achieving 100 per cent utilisation" across all projects with a shift in business and increased demand for digital-technology based services, Business Standard reported a person familiar with the development as saying. For example, if a project currently has eight software engineers, roughly two of them are released and redeployed on other projects to achieve full utilisation across projects.

"However, no one is kept idle on the bench now," an engineer at IBM told the newspaper. "In some cases, people have to upgrade themselves with new technology skills to get redeployed. Those who are not willing to do this are at risk and often told to go."

Industry body Nasscom has maintained that workforce realignment in IT services linked to performance appraisal processes is a regular feature every year.

The government too sought to allay fears of large scale layoffs by tech firms saying the IT sector remains "robust" and is, in fact, moving beyond plain-vanilla back office services to highly skilled jobs.

IT secretary Aruna Sundararajan has said the IT companies have given assurances that there is "nothing unusual" this year and decision to not renew some contracts were part of the annual appraisal process.

Some of the companies which have been named (as undertaking job cuts) have clarified that there is nothing big this year," she said on the sidelines of Broadband India Forum event last week.

 Over the past few weeks, tech majors like Wipro, Infosys, Cognizant, and, more recently, Tech Mahindra have initiated annual performance reviews, a process that weeds out bottom performers or non-performers. This has added to fears that thousands of employees in the sector could be shown the door over the next few weeks.

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