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Techies brace for legal war amid reports of ‘6,000 layoffs’ at Cognizant

India TV Business Desk Chennai 08 May 2017, 15:49:51
India TV Business Desk

The news of Cognizant possibly eyeing as many as 6,000 layoffs in India this year as it turns its focus on hiring more Americans in wake of Donald Trump’s ‘America First’ rhetoric has sent Indian techies exploring legal options to counter the company’s move.   

Holding the layoffs by Cognizant as ‘illegal termination’, the Forum for IT Employees (FITE) has sent representations to assistant labour commissioners and the state labour commissioner. "We have submitted a representation with the state government as of now. The plan is to formally file for conciliation, which is the first step before the issue can be taken to labour courts," Vinodh AJ, general secretary of FITE, told ET.

Also read: Cognizant likely to fire 6,000 employees this year: Report

The move by IT professionals from Chennai seeking legal options and preparing for conciliation proceedings with the state labour department comes despite Cognizant president Rajeev Mehta’s categorical denial of any retrenchment.

Notably, the FITE is the same forum that had won a retrenchment case in the Madras High Court two years ago. In 2015, the forum won a stay on the firing of a TCS employee. The Madras HC also directed the state government to ascertain if employees with IT companies can be covered under the Industrial Disputes Act. The judge also questioned if IT employees can be viewed as “workmen” under the act.

Months later, the state Labour secretary Kumar Jayant wrote to the New Democratic Labour Front (NDLF) — another front for IT employee rights — saying IT employees are free to form unions and no IT company can be seen exempt of the provisions of the Industrial Disputes Act.

The employees' move for conciliation comes after several reports suggested that Cognizant may also increase involuntary exits from its workforce during the current appraisal cycle.

Faced with pressure from investors over its stuttering growth in the face of business headwinds, Cognizant recently decided to offer an exit option to a group of its senior employees to help reduce its wage bills and trim costs.

In emails sent out last Tuesday night to its ‘D+ category’ employees (directors and senior VPs), Cognizant offered them the option to exit the organisation on a cordial note by accepting either six or nine months' pay as severance package.

Cognizant did not comment on the number of people who fall into the category .“We are offering a voluntary separation incentive to some eligible leaders, representing a very small percentage of our total workforce. It is related to our overall company strategy to accelerate our shift to digital and to deliver high-quality, sustainable growth,“ a Cognizant spokesperson had told TOI.