Why lay-offs are kept a secret at India Inc

An elderly cobbler, who sits at the busy Lok Puram crossroads in the Mumbai suburb of Thane and does odd jobs till the sunset, hesitantly seeks a favour: his younger son, who did an ITI course and an apprenticeship at Larsen & Toubro (L&T), desperately needs a job. The Indian multi-national engineering giant could not accommodate him as the company decided to stay “agile and competitive” by terminating 14,000 employees a few months ago. Not just L&T, every other infra and manufacturing company faced a slump in contracts and demand, forcing them to freeze their hiring, or worse, sack employees, and turn agile.

The helplessness of the cobbler is contagious. He represents the faceless, ill-informed Indian parent, awfully clueless about job prospects. Like his son, thousands of diploma holders, graduates and post-graduates, armed with professional degrees, flood the job market every year. The mismatch in demand and supply is getting alarmingly wider.

One of the largest production hubs of manpower, India does not have in place a system of companies reporting recruitment and lay-offs. The drop in job prospects in a particular industry is shrouded in secrecy. The news then spreads informally with a lag of 4-5 years. This delay ensures thousands of ill-informed students end up with a wrong career and seeking a job completely unrelated to what they have mastered in.

Lay-offs are an anathema to India Inc. In most cases, companies hate reporting it as it leaves a smudge on them that they are facing a whirlwind of an economic slowdown. This is why even 'admired' companies sack employees surreptitiously and then, refuse to share details, for the fear of a market onslaught.

When Wipro, India's third largest software services exporter by revenue, sacked several employees recently, it plainly refused to provide any specific figures. In a routine statement, it called it “a rigorous performance appraisal process” meant to align its workforce with business objectives, strategic priorities and client requirements. “This evaluation process triggers a series of actions such as mentoring, retraining and upskilling. It may also lead to the separation of some employees from the company," said the company. Crudely translated, this HR jargon only means that 'you are fired'.

As start-ups flounder one after the other, there is inevitable bloodshed. Nobody bothers to count their numbers, nor offers any help. On the other side, in the ongoing season of mergers, jobs are a direct casualty.

HDFC Bank, the second biggest private lender in India that claims to provide “five-star” services to its clients, has seen its staff strength tumble by 6,096 (around 7%) to 84,325 during January-March quarter as the bank rode digital revolution post demonetization after deliberately slowing its branch expansion.

In IT sector, sacking employees from the lower level and mid-level is a daily routine. In 2016, Infosys fired around 9,000 jobs, and 2017 doesn't look good either. The other biggies such as TCS, Cognizant and HCL Technologies have slowed down hiring from campuses. Experts predict that top five IT companies would hire around 60,000 engineers from campuses this fiscal, half of what they hired last year. They blame it on the aggressive use of automation and technological advances.

It's time companies began to report lay-offs and hiring freeze. The data can act as a true bellwether of India’s changing job market.