Cognizant defends separation package for employees amid concerns over layoffs
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Bengaluru: Under fire for its “employee separation package”, IT firm Cognizant Technology Solutions has said the company has offered it in India and the US for the first time, unlike its peers who keep taking such steps regularly.
It has rolled out a “voluntary separation programme” (VSP) for directors, associate vice-presidents and senior vice-presidents, offering them 6-9 months’ salary to make way for the new generation to move up the chain. The Forum for IT Employees (FITE), an IT workers’ union, has already approached the labour commission in Chennai, Hyderabad and Pune and submitted petitions to stop the “illegal terminations” happening at the company.
In a letter to employees, Cognizant president Rajeev Mehta said, “While many of our peers regularly offer separation packages to their employees, this is the first time we have done so at Congzinant. Understandably, the concept is unfamiliar to lot of our associates.” The programme, he said, gives participants a chance to explore other opportunities while making way for the next generation of leaders to step up. “As its name makes it clear, the VSP is voluntary. No one is required or even asked to participate. We believe this programme benefits associates who have opted in and are seeking to make a change in their career,” he said.
FITE, a representative body of employees working in IT companies and call centres, has alleged that the US-based firm is illegally terminating thousands of employees by forcing them to resign. It has said that highly-paid experienced professionals are being replaced by those with lesser experience and lower pay. After a meeting on 11 May, Cognizant had sought two weeks’ time from the Telangana labour department to come up with a reply on the said issue.
“Cognizant has not done any layoffs. Each year, in line with industry best practices, we conduct performance reviews to reflect on the work of last year and ensure goals for the subsequent year are clear. We are being committed to being a meritocracy. We believe that’s good for all associates around the world,” he said. Mehta also said the company has been ramping up its recruiting efforts in the US for a number of years and will continue to do so, while hiring in most other parts of the world including India. “We continue to hire in local markets around the world. We have been ramping up our recruiting efforts in US for a number of years and will continue to do so while hiring in most other parts of the world including India,” he said.
Indian IT players including Infosys and Wipro have initiated performance reviews, a move that could see thousands of workers being shown the door. While IT companies have been among the largest recruiters in the country, increasing automation of processes is expected to lead to reduction in hiring in coming years.