PremiumBENGALURU: Nasdaq-listed IT services firm Cognizant Technology Solutions Corp. has laid off thousands of employees on bench, who were not actively involved in any client projects.
In IT services companies, employees on bench are considered “non-billable" resources as their cost is not billed to any client. However, typically companies maintain a small percentage of bench employees so that they are prepared to execute projects immediately.
State IT employee unions in Karnataka and Chennai have alleged that Cognizant is executing mass layoffs after benching nearly 18,000 employees across India. The numbers could not be independently verified by Mint.
Karnataka State IT/ITeS Employees Union (KITU) has “strongly condemned" the decision taken by the management of Cognizant.
“The reports on large scale layoffs are coming from ‘Cognizant’ in the name of ‘effectively managing workforce utilisation’. Thousands of employees all over India are going to be the victims of this. Several victimized employees approached KITU, and the Union has initiated a legal battle against the Cognizant management for this illegal action," KITU said in a statement.
The New Democratic Labour Front (NDLF), a Chennai-based IT employees' union, had also alleged that Cognizant is benching employees at its Chennai offices, and then forcing them to resign after 41 days.
Cognizant is the second IT company after Tata Consultancy Services Ltd (TCS) to employ more than 2 lakh staff in India. It has a global strength of nearly 2.9 lakh, most of whom are based in its Chennai offices.
A Cognizant spokesperson, however, has indicated that any reported layoffs are only likely to be performance-based exits. “Performance management is a normal process across all companies in the IT industry, including Cognizant."
The spokesperson added, “While Cognizant does not comment on rumour and speculation in the marketplace, we would like to clarify that recent third-party allegations regarding a specific number of job actions are not accurate, not based on facts, and were not announced by Cognizant."
Cognizant said it continues to hire at all levels in India and globally. “Likewise, the company continues to invest heavily in upskilling and reskilling its employees at scale in newer digital technologies, including cloud, analytics, digital engineering and internet of things (IoT), where the company is seeing above industry-average growth."
