Saturday, May 02, 2009

Layoff Dharma

I want to quickly point out a couple of things about layoffs.
I see people often arguing that layoffs are essential load shedding for a business cycle. Whenever you rant about layoffs, a bunch of guys talk about the businees point of view.
While it is true that layoffs are unavoidable, we have to look at a bunch of predicaments employees face in the Indian context:
1. They are not paid fair compensation during layoffs - most companies only pay till the day the layoff occurs, while according to law they are supposed to pay till the month end. Thus companies violate the law for their benefit.
2. Even during the peak of this recession, you see companies insisting that the layoffs are performance based. Obviously, (as I have argued here and here), almost every layoff in this cycle is because companies THEMSELVES are not performing well. They are losing projects, are unable to hold on to clients and find new clients. Yet, the fallacy is mantained that a vague "performance" criteria goes into layoff listing. The truth is, there cannot be any independent verifications of performance. It is a vague term. Whoever heard of companies laying off employees from billable projects enmasse?
3. As I wrote before, companies have hiked the "notice period" for an employee to leave to be an unmanageable THREE MONTHS. This was done when the market was good so that companies can treat employees close to bonded labor. They have thretened and cajoled employees to sign these notice periods.
But while laying off those same employees, they do not adhere to any notice period. By any standards this is unfair. While we are ready to give allowance to companies for maintaining their interests, we are not ready to grant the same to employees. Why can't the notice periods be mutual?
4. More than anything, what makes me angry is that the HR and management keeps talking about "loyalty" as a prime virtue in any company. The relationship between an employee and employer is contractual, and there is no need to talk about loyalty. Yet, they kept claiming some kind of divine moral authority based on loyalty. How loyal have THEY been to their employees?
5. There is another very important consideration here - companies like to treat employees as if they are contract workers, during a recession. But, they are NOT allowed any of the conveniences of a contract worker. If you work for a company, and you want to earn more money, you CANNOT freelance. If you do it you have to secretly. Thus, you KNOW that you will be laid off during a business cycle, YET you cannot accumulate additional money for the rainy day. I think this is the unfairest condition, either mentioned in employee agreements or implicitly enforced. If an employee does NOT use any of the company's resources and does NOT go after a company's clients (non-solicitation) I don't see why he/she cannot freelance.

Thus, the scenario in India is loaded against employees. Layoffs are fine, if you give a sufficient notice, adhere to the severance package, and allow employees to freelance in their spare time. Otherwise it is just naked exploitation.

I will write more about freelancing next, but here are the list of my links on the recession:

IT Layoffs - Stop Blaming the Staff
IT Layoffs and Corporations
A Quick Note on the Economic Downturn
Being Self-Employed in IT

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