Friday, February 15, 2008

IT Layoffs - Stop blaming the staff

In the recent days TCS and IBM have cut jobs in sight of a looming US recession. This has been widely reported in the media and much analysis has gone through.
I have been reading these news items and analysis, and there is a common thread running through them. A recent Ananda Vikatan article I read prompted me to write this post.
The industry "analysts" and the company's own people are at pains to point out that the employees were fired because of lacklustre performance. It is a regular "weeding", they say and has nothing to do with the company's own performance.
In the case of IBM, the people who were laid off were mostly trainees. These companies recruited these people after different rounds of interviews. Suddenly, when the US market was going down, these guys realized that they had "non-performers" among them?
This is corporate India for you - in the last few years we have become a country that shamelessly celebrates corporations. News media calls them "India Inc" as if they represent India herself. The media have been brainwashing us into thinking that nothing "India Inc" does can go wrong - and that these are men of steely will working towards a common purpose. Most corporate advertisments try to align themselves with patriotic fervor.

The middle class has gotten to think that its interests are closely aligned with those of these corporate masters.
That is why, TCS and IBM can get away with this, without criticism for their spin.
Mind you, I am not saying they cannot lay off - my point is that there is a difference between layoffs and firings. By calling mass layoffs as firings (for performance) the companies are trying to keep their reputation clean. These companies want to keep their sharholders happy - so for naked advantage, they are saying that nothing is wrong with themselves. They are laying the blame on the poor employees laid off. The truth is that TCS and IBM anticipate revenue problems. They are shedding people BECAUSE of the company's problems - not merely because of performance. By shifting the blame on the victims, TCS and IBM are trying to shield themselves.

This is cruel, because our society has no social security net for people fired or laid off. These employees are victims of capitalism and they should be called as such, instead of blaming them. The companies should be honest about this.

The point is also that in modern India, these employees have no constituency. An employer just has to say "This guy did not perform" and everybody accepts it without questioning. Performance is a general word and no one can really cross check.

This reminds me of the 2001 recession when H1B workers started returning to India. The same kind of jeering response rose from our media at that time. The writer Sujatha said that "non-performers were sent back" - as if the American companies were the ultimate arbiter of performance. I was in the United States at that time and I know for a fact that people who were laid off just happened to be in the wrong departments. Entire divisions were cut down.
You cannot call yourselves a capitalist society and then keep jeering at people laid off.


Prakash said...

I completely acknowledge this- Again this is a chicken and egg story. After having recruited many engineers from campus, my perspective is clear on the fact that the young budding engineers are aligned with capitalist mindset. This is one of the cons of capitalism which comes along with it. I know for a fact that there are many talented engineers who are vegetating in the name of capitalism and vice-versa.

Sailesh Ganesh said...

Shankar, companies/divisions dont perform and are shut down. Employees lose their jobs. They'll find other jobs. Happens all the time. What is your point?

Ramiah Ariya said...

Sailesh, I think my "point" is pretty clear - that companies cannot blame employees for their woes.
If you pay any attention to the labor rules in the United States, you will realize that by law, companies are required to distinguish between mass layoffs and firings for under performance. Ever wonder what that "point" of that was?
It is simple - if IBM laid off a thousand workers in the United States, not only do they NOT blame those employees for under performance; they also pay the required severance; PLUS the government pays social security for those employees.
On the other hand, when companies FIRE employees, they are not required to do any of that.
This is a necessary part of capitalist scoieties because in lean economic times, companies ARE forced to let go of people. At that time, the law clearly distinguishes between such necessary adjustments and "under-performance".
In India, on the other hand, TCS and IBM have been allowed to get away (by the media) with calling what are essentially mass layoffs as firings.
This is of course what I have conveyed in the post; and I am not sure what your point is here - "companies under perform; shutdown and employees lose their jobs" - Are you seriously equating companies and individuals?

Well, if you are, that is another whole mistake. Again labor law and company law and virtually every civilized society distinguishes between corporations and their employees - that is the whole reason for the existence of such laws. When a company shuts down, whoever heard of the government or society paying severance - on the other hand, layoffs of employees requires severance. Ever wonder why? Because an individual has a different set of rights. This is the entire basis of social security and unemployment benefits in the United States and other developed countries.

Anyway, I repeat, since you have missed the whole "point" - it is not about the layoffs themselves. It is the fact that the corporations have managed to call layoffs (that happened because of their own revenue concerns ) as firings. That is a distortion of the truth - and you can check if Citigroup blamed the layoffs a couple of months back on "under performers". They did not - because they would not have gotten away with it in the USA.

Sailesh Ganesh said...

Yes, sorry, I missed your point initially.

My response really was for "These employees are victims of capitalism and they should be called as such".

Why should capitalism be blamed for job losses? On one hand, you admit that companies should not be stopped from laying off people, but on the other hand, why claim that the people who have been laid off have been victimized?

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Ramiah Ariya said...

Where is the contradiction in those two statements? The reason these people were laid off was because:
a) the companies wanted to keep their shareholders happy
b) the US recession directly hits the companies because of the ties between the two economies.
Thus, there is really no question that a capitalist and globalised economy CAUSES such perioidic upheavals. Thus, the people laid off ARE victims of capitalism.
Now, I am not going into if capitalism itself is a good thing or a bad thing - my point is simply that this is the nature of the beast. Let us not deny that there are many victims or sufferers in the growth model we have chosen. Let us acknowledge such victims.
Instead what we see is an attempt to blame an entirely different class for such layoffs. It is as if we cannot acknowledge ANY problem in the economic model we have chosen. These companies have ended up blaming the victims themselves - and the media unquestioningly prints that.

On the other hand, developed countries have acknowledged, atleast internally, that a capitalist society WILL have such victims - thus they have tried to protect the victims.
How are we going to protect our own victims if we do not even think there is a problem here?

hammy said...

Well said.

They are having problems, they are laying people off. It's a market shift... something unanticipated that just didn't fit into their plan... Sad, but true. And we are ready to accept reality.

But for God's sake accept responsibility for the fact. Don't shoot the dead. Don't abuse those who were not given a chance.

The mere fact that trainees were laid off reflects the hypocrisy... They were too young for their potential to be revealed; if anything, the fact that a large percentage of trainees were sent off reflects the company's ineptitude... not the employee's...

Their comments were merely adding insult to injury.

Sailesh Ganesh said...

I am objecting to the word "victim" because that implicitly paints capitalism as something that is bad/evil. I wont go into why capitalism (or market economy) is a wonderful system, seeing as that is not the point of this post.

But to your point of companies being required to distinguish between firings and layoffs, I agree. I will, however, not call it the company's ineptitude as hammy does (it might be true in this specific instance) because the environment is something beyond the company's control.