IT cos going for quiet firing to reduce costs

In India’s IT sector, the practice of quiet firing, where employees are nudged to leave voluntarily, aims to avoid the stigma of layoffs and prevent talented staff from seeking other opportunities when layoffs are announced. But this approach harms trust and respect, making the workplace demoralizing and unethical. To mitigate this, fostering transparent communication between employers and employees is important. - Aditya Narayan Mishra, CEO, CIEL HR, tells Bizz Buzz

Quiet Cutting

• The process of quiet firing still underway in 2024
• Employees are arm-twisted to resign
• Practices include abrupt transfers, stopping flexible working options & many other tactics

Bengaluru: Indian IT services firms are following quiet firing methods to reduce headcount as demand environment continues to remain weak.

According to sources in the know, such quiet firing is leading to discontentment among employees and may lead to high attrition once the demand for talent comes back. Reportedly, the All India IT & ITeS Employees’ Union (AIITEU) had stated that around 20,000 technology professionals were laid off quietly in the IT/ITeS sector in 2023. These layoffs impacted companies of all sizes within the IT services industry, the employee union said.

In recent quarters of 2024, such quiet firing is still going on as many companies are asking staffers to shift their centres of operations abruptly. Similarly, managers have asked several employees to work from offices on all days as compared to three days a week.

Quiet firing is an approach wherein employers are asked to resign than the company firing them. These staffers are usually arm-twisted to resign, which is shown as voluntary resignation. This is usually led to involuntary attrition within the company.

“In India’s IT sector, the practice of quiet firing, where employees are nudged to leave voluntarily, aims to avoid the stigma of layoffs and prevent talented staff from seeking other opportunities when layoffs are announced. But this approach harms trust and respect, making the workplace demoralizing and unethical. To mitigate this, fostering transparent communication between employers and employees is important. Companies should prioritise expressing their willingness to assist employees and guide them towards departure in a supportive manner,” Aditya Narayan Mishra, CEO of CIEL HR told Bizz Buzz.

Indian IT firms have been reducing their headcounts since last fiscal year as they are trying to save cost in a tepid demand environment. Top Indian IT firms including Tata Consultancy Services (TCS), Infosys and Wipro all together saw employee count plunging by 63,759 in the last fiscal year (FY24). In the fourth quarter alone, TCS, Infosys and Wipro shed 13,362 employees owing to a tough demand environment.

Not only large firms, even mid-tier and small firms have laid off several employees over the last quarters.

“We have not seen any improvement in the hiring scenario of Indian IT services providers yet. While GCCs (global capability centres) are showing marginal uptick in hiring, it is not enough to move the needle,” Supaul Chanda, an HR expert with decades of experience on the staffing space, told Bizz Buzz.