With pink slips starting to fly, it’s time to yodel the blues at Big Blue.
As many as 165 ‘resources’ — euphemism for employees on contract — have been shown the door by IBM Global Technology Services, the consulting and outsourcing firm that’s part of the US hardware giant, two sources familiar with the development said.
And another 1,000 are expected to be given the marching orders soon.
The sackings are believed to be part of a first round of downsizing, likely on account of IBM losing or ramping down some projects.
“The company has not cited any reason. In fact, no one barring the top management had any inkling of the move,” one person said, requesting he be not identified.
Typically, contract employees or consultants are hired just for specific project requirements.
The action comes even as the US and Europe grapple with recession, which is expected to have a significant impact on outsourcing firms.
When asked to confirm the job cuts, a spokesperson for the company said, “IBM continuously transforms its business, rebalancing skills and capabilities in order to meet the changing needs of clients and our business as a whole.”
Dataquest, a journal that tracks the industry, estimates IBM in India had revenues of Rs14,132 crore in the year to March 2011, clocking a growth of 14% over the previous year. Nearly 52%
of the revenues came services delivered to clients outside India.
“The move to lay off people depends on how specific projects shape up. This is normal practice in the US,” said Shamanuja Das, editor of Dataquest.
“In fact, in the US, most companies follow this practice. Unlike India, where management usually thinks twice before asking its employees to leave, US has a different culture,” Das said. “So, in case a project is not giving expected returns, people involved in it get fired.”
Also, new hires at IBM Global Technology Services have either not received their offer letters or are yet to be given a date of joining, a source said.
IBM has fired staff in the past too. In 2008, it reportedly dismissed around 700 freshers with the onset of the financial crisis.
Interestingly, last month IBM had increased the notice period to be served by its employees from 30 days to 90 days, in an apparent bid to reduce attrition.
With the slowdown in US imminent and fast approaching Oct-Dec time frame companies will be cautious in hiring work force and will take this opportunity to get rid of non performers. Expect more and more firings happening in the upcoming months !
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