Understanding Silent Layoffs: An Infamous Corporate Trend

In late 2023, a 31-year-old employed man named Akash received a mail from his manager and HR asking him to join a virtual meeting. The meeting lasted for almost 15–20 minutes. During the meeting, Aakash was given two options: first, Aakash would either be terminated along with a lower payout, or second, Aaksah would voluntarily resign and be given a four-month salary. Aakash was working at Teradata, a cloud analytics company. Aakash told money control that when he asked his manager to give him some time to think, HR and manager denied it and asked Aakash to give his decision now. Aakash consulted with his cousin and opted for a voluntary resignation. Since Aakash left his job, he has given almost 20–25 interviews, to no avail. Aakash said, “It is very difficult to find a job in the current market environment. The chances of negotiating the salary also don’t exist. I am now dependent on my parents.”.

Sriram and his fellow workers were without work for 25 days after their client ended their contract a few months ago. The Cognizant company tried to find another project for Sriram but failed to do so. The company asked Sriram to resign and gave him a three-month salary.

Sriram and Aakash are just two names that have come to light, but there are many other IT service employees who lost their jobs between 2023 and 2024 due to low demand in the industry.

What are silent layoffs?

In 2023, around 20,000 tech workers lost their jobs due to silent layoffs. This data was shared by the All India ITs and ITes employees union.

Silent layoffs generally give an employee a time duration of 30 days to find a new role within the company; if the employee is unable to do so, they are being fired. About 2,000–3,000 professionals lost their jobs in the top Indian IT services companies in 2024, as reported by the IT employee union Nascent Information Technology Employees Senate (NITES).

The Shame of Being Terminated

“Companies are using various ways to fire their employees, and those who resist are fired by the company immediately. If terminated is written your relieving letter, it is very difficult to find another job,” said the president of NITES, Harpreet Singh Saluja.

The General Secretary of AIITEU said that “sometimes employees have to sign non-disclosure agreements to receive their full payout.”.

Increasing Trend

Layoffs are happening in companies of all sizes. Teradata, a cloud analytics company established in San Diego, laid off 35–40 employees at its Hyderabad campus after cutting 1,100 jobs worldwide.

Boston based financial services company State Street took over the control of operations of Atos Syntel in India last year. According to the sources around 400-500 employees were laid off in March 2024 in India.

According to reports from multiple sources, Infosys laid off 200–500 employees in 2024 by asking them to resign voluntarily. However, both Infosys and Atos have denied these layoffs.

Record high job losses

Since the 2007-2008 financial crisis, this has been one of the highest years for layoffs. The experts are worried because the companies are dropping their smaller clients. Leader-Technology Services Research at management consulting firm Everest Group, Yugal Joshi, said, “They began cutting their smaller clients, and then you can’t find new projects for all the employees. You have to let them go.”.

Modus Operandi

Saluja explained that this is a structured layoff, not a mass one. When an IT company wants to fire its 1000 employees, they start this process gradually by firing 10–20 employees from different offices each month during the time span of three months to save themselves from attention.

This trend was witnessed in the overall employee decline for the top 5 IT services companies in India in 2024. Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, and Tech Mahindra together lost about 69,167 employees due to uncertain demand and cancellations. For TCS and Infosys, this was the first full-year headcount drop in two decades.

Joshi also stated that the combined headcount of the top 5 companies dropped in the last quarter due to silent layoffs.

According to the experts, the Indian IT service companies have changed their working models to make every technical employee a billable resource for the company. 

Joshi said, “Many people at the middle level are carrying with themselves some sort of influence or tagged revenue number, and this is the reason for the problem because not everyone is interested in doing this.”.