Quiet layoffs are sweeping the Indian IT sector, affecting over 20,000 employees

Aakash, 31, recalls the day in late 2023 when he received an email from his manager and HR director asking him to join a virtual meeting.

This lasted 15–20 minutes and ended with Hobson being elected.

His company Teradata offered him two options: a cloud analytics and data platform; he would either be fired with less pay or could voluntarily resign and take home four months’ pay.

“When I asked if I would be given some time to make a decision, they said I had to inform them during the meeting itself. I quickly spoke to my cousin and decided to resign,” Aakash told Moneycontrol.

Four-five months have passed since then and Aakash has given at least 20-25 interviews, but to no avail. “It was difficult to find a new job in the current market conditions; there is no chance for salary negotiations. My severance funds are also running low on expenses. I am now somewhat dependent on my parents,” he said.

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Sriram and some of his colleagues spent 25 days on the bench at Cognizant after one of the global IT services giant’s clients decided not to renew its contract a few months ago. The company tried to find other projects to implement Sriram, but when it found none, he was asked to resign and was given three months’ salary in the form of severance pay.

In recent months, employees of all experience levels have been asked to resign as a result of silent layoffs at Cognizant.

Aakash and Sriram are just two of the names among several thousand IT services workers who were laid off in 2023-24 amid challenging industry demand.

Quiet layoffs

According to data shared by the All India IT and ITeS Employees Union (AIITEU), around 20,000 technicians lost their jobs in the calendar year 2023 due to ‘silent’ layoffs in the IT/ITeS sector in India. AIITEU believes the actual number is higher and has not been reported yet. These layoffs occurred in IT services companies of all sizes.

The most common way to achieve a silent dismissal is to give the employee 30 days to find a new position in the same company. If the employee cannot do this, he or she is asked to leave the position.

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Silent layoffs are a common practice in many companies where employees are laid off and forced to resign discreetly.

According to the Nascent Information Technology Employees Senate (NITES), among India’s top IT services companies, around 2,000-3,000 professionals lost their jobs in 2024 alone, according to the Nascent Information Technology Employees Senate (NITES).

The stigma of ending

“Companies are firing workers in many ways, and those who resist will be fired (immediately). When you are marked as ‘dismissed’ in the dismissal letter, then it will be very difficult for that person to find another job,” said Harpreet Singh Saluja, president, NITES.

In some cases, employees are also forced to sign non-disclosure agreements (NDAs) to get their full salary, said Saubhik Bhattacharya, general secretary of AIITEU.

According to Bhattacharya, it doesn’t end with downsizing teams; current employees are now forced to work 14-16 hours a day compared to 10-12 hours a few years ago.

“We see this across all companies. With an intention to reduce and improve profit margins, companies are increasing the number of hours worked by each employee,” Bhattacharya told Moneycontrol.

A broad trend

These layoffs occur regardless of the size of the company.

Teradata, a San Diego-based cloud analytics and data platform company, laid off around 35-40 employees from its Hyderabad campus late last year. This comes after the company had earlier laid off around 1,100 employees globally, including India, in 2022, sources in the know told Moneycontrol. Judging by its employee count on LinkedIn, Teradata has over 10,000 employees worldwide.

Boston-based State Street acquired the India operations of joint venture partner and technology services provider Atos Syntel last year. According to sources, around 400-500 employees were laid off in India in March 2024 as part of the improvements.

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Several employees and industry sources told Moneycontrol that this is also happening at Accenture, Cognizant and Infosys.

In fact, multiple sources report that Infosys has laid off nearly 200-500 employees across its campuses in 2024, although they have been asked to resign voluntarily for this purpose.

Both Infosys and Atos Group have denied laying off employees.

In a statement, Shaji Mathew, Group Head, Human Resource Development, Infosys, said, “We would like to clarify that there have been no layoffs at Infosys. As an organization, we consistently focus on high efficiency and exemplary work ethics. We continue to invest and reskill our people to ensure a seamless career transition, with the goal of enabling all our people to remain skilled and proficient in a global industry ecosystem increasingly powered by artificial intelligence.”

An Atos Group spokesperson said: “Atos Group India has not made any large-scale layoffs this year. Please note that State Street has assumed full ownership of its joint venture with Atos Group (State Street Syntel Services Pvt. Ltd.) in 2023.”

“It’s a normal way of operating as a global organization, and sometimes it means aligning our people with our priorities. We do not take these actions lightly and treat any departure with the utmost respect and support,” a Teradata spokesperson said in response to Moneycontrol queries.

The spokesperson added: “Teradata is focused on maintaining profitable growth by remaining agile and investing wisely. We are a company that competes in a dynamic marketplace, and as technology evolves and the marketplace changes, we sometimes adapt our organization to maintain and grow our position.

Accenture, Cognizant and State Street did not respond to queries sent by Moneycontrol at the time of publication of the article. The article will be updated to reflect companies’ views as they respond.

Record high job losses

Industry experts called it one of the record years of layoffs since the 2007-2008 financial crisis.

Yugal Joshi, technology services research leader at consulting firm Everest Group, says challenging macroeconomic scenarios at the time also played spoilsport. “Everyone has promised to maintain or increase operating margins, and for a services company, there aren’t many credible levers other than downsizing. They have gone to the maximum level of offshoring and pyramid rationalization and they have to hire locally and onshore, so for them this is one of the best centers.”

Experts have expressed concern that some service providers limit the number of smaller customers because once they lose customers, they rarely get them back.

“They started trimming their long tail and what to do with it? They cannot all be re-deployed. You will have to let them go,” Joshi said.

Modus operandi

Saluja explained that this is not a mass layoff, but an organized one, and if a particular IT services company wants to lay off 1,000 employees, it will do it in stages. Every month they will lay off 10 to 20 employees from different offices in different cities. This process will take three months, and because it is drawn out, it will not attract much attention.

This was also reflected in the trend of overall employment contraction in India’s top five IT services companies in FY 2024. These five companies are Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro and Tech Mahindra.

Collectively, they lost around 69,167 employees in FY24 amid an uncertain demand environment, delays in expediting deals and deal cancellations. For some companies like TCS and Infosys, full-year employment declined for the first time in two decades.

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“Total employment at the five largest companies declined in the previous quarter. A big part of that is quiet layoffs, related to performance management and other issues,” Joshi said.

Joshi says IT services companies have been laying off workers for some time now, but this time the number of layoffs may be higher than usual for a number of reasons. These can range from macroeconomic uncertainty to the impact of artificial intelligence (AI) on productivity.

Experts say Indian heritage IT service providers have changed their operating models where they want every technical person to become a paid resource. A billable resource means an employee who has been delegated to some project in which the client pays for the work performed.

“Many people, even at mid-level, have some influence or a certain amount of revenue, which creates a problem because not everyone wants to do it. And of course, if they don’t, that will be the only option,” Joshi said.

(Employee names have been changed to protect their identities.)

Also read: TCS, Infosys and Wipro employee count drops by over 13,300 in three months