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Wipro layoffs: Here's why Indian IT sector may see more job cuts in the days ahead

India Today logo India Today 21-04-2017

India's third largest software services firm Wipro has fired hundreds of employees as part of its annual "performance appraisal".

Wipro layoffs: Here's why Indian IT sector may see more job cuts in the days ahead © Provided by India Today Wipro layoffs: Here's why Indian IT sector may see more job cuts in the days ahead

According to media reports, Wipro laid off around 600 employees, while many predict the number to go as high as 2,000.

The layoffs at Wipro come at a time when industry body Assocham has warned that the Indian IT firms may be forced to displace work force amid US tightening H-1B visa norms and rising rupee leading to lower realizations for software exports.

Nearly 86% of the H-1B visas issued for workers in the IT sector go to Indians and this figure is now sure to be scaled down to about 60% or even less, Assocham had said.

The Bengaluru-based company had over 1.79 lakh employees by the end of December 2016. The company, however, did not comment on the number of employees that have been asked to leave.

When contacted, Wipro said it undertakes a "rigorous performance appraisal process" on a regular basis to align its workforce with business objectives, strategic priorities of the company, and client requirements.

"The performance appraisal may also lead to the separation of some employees from the company and these numbers vary from year to year," it added.

Visa troubles for the Indian IT sector are not confined to the United States. After the US move to tighten visa norms, Australia announced scrapping of 457 visa used largely by Indian IT professionals.


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In a statement earlier this week, Australian High Commissioner Harinder Sidhu had said, "India provides the highest number of temporary skilled workers to Australia of any country; eight out of the top 10 occupations for Indian 457 visa holders (as at December 2016) were IT professionals."

In the neighbouring Southeast Asia, Singapore has also begun curbing visas for Indian IT professionals. Commenting on the visa hurdles in Singapore, Nasscom president R Chandrashekhar had told TOI, "This has been lingering for a while but since early-2016, visas are down to a trickle. All Indian companies have received communication on fair consideration, which basically means hiring local people."

The $100 billion software export industry that employs over four million people gets over 60 per cent of their revenues from the North American market, about 20 per cent from Europe and the remaining from other economies.

With the UK already hiking the minimum wage requirement to 35,000 pounds for tier-2 visa immigrants, this latest move by the US will act as a definitive dampener to the Indian outsourcing industry.

With visa programmes in these countries becoming more rigorous, Indian IT companies are likely to face challenges in movement of labour as well as a spike in operational costs.

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