1/28/2015

IBMIndiastaffstillbattletechbluesfearingmorelayoffs|ETCIO

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#Corporate
#layoffs

#VinnieMirchandani

#TataConsultancyServices

#Nasscom

#IBM

IBMIndiastaffstillbattletechblues
fearingmorelayoffs
PankajMishra|28January2015,8:48AMIST

BENGALURU:For
employeesofIBMIndia,once
consideredthejewelinthe
crownofBigBlue,thecoming
weeksareexpectedtobring
yetmorelayoffsandsoul
searchingabouttheunsettled
natureofworkinginthe
softwareindustrywhichhas
helpedcreateanewmiddlein
Indiaoverthepasttwo
decades.
AcrossthreeofthebiggestofficesofIBMIndiainBengaluru,anxiousemployeesare
scramblingtofindnewjobsinITservicesindustryorevennewcareersatonlineretailing
firms,engineeringortelecommunicationcompanies.LayoffsarenotnewatIBMinIndia
theyhavebeenafeatureforaboutayearasCEOGiniRomettyorchestratesa
restructuringwhichshebelieveswillhelpthe103yearoldcompanycopewiththerapid
changesintechnologyandbusinessmodels.
"It'sacompleteoppositetotheemotionswehadwhenIBMgavestockoptionstoall
employeesinJune2011,"saidShekhar(heonlygavehisfirstnametoprotecthis
identity),aformerIBMemployeewhonowworksataBengalurusecuritysoftware
startup.

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IBMIndiastaffstillbattletechbluesfearingmorelayoffs|ETCIO

Fromaround1.65lakhemployeesonitspayrollin2011,IBM'sIndiaheadcountis
expectedtoslidetoonelakhbyMarchthisyear.GloballyIBManditsunitshad4.33lakh
employeesattheendof2011comparedtoanestimated4.3lakhnow,suggestingthat
thelayoffshavebeenparticularlysevereinIndia.
BLEEDINGBLUE
IBM,whose2014revenuewas$93billion,hasdeniedareportonMondaythatitisabout
tofirearound1.1lakhstaffglobally,butitacknowledgedthatthereductionswillaffect
"severalthousand"employees.Lastweek,IBMsaiditwastakingrestructuringchargesof
$580million,withoneWallStreetanalystsuggestingthatcouldmeanjobcutsofjust
8,000.ETspoketoatleastadozenpeoplewhoweresackedbyIBMIndia,apartfrom
severalcompanyinsiders,forthisstory.AnIBMIndiaspokeswomanhadnotresponded
toET'squerysentlastweek.
"WorkfromhomeatIBMhasacompletelynewmeaningnow,"saidasourcereferringto
theflexibleworkarrangementofferedbyIBMtonearlyhalfofitsemployees.
ForthesoftwareengineerswhoareleavingIBM,newopportunitiesarecomingtheirway
fromthelikesofrivalCognizantandIndia'sbiggestonlineretailerFlipkart.Butitisnot
justengineerswhoarelosingjobssalesprofessionalsacrossdivisionsarebeinglaidoff
unitsaremerged.Accordingtoapersonfamiliarwiththediscussions,IBM'sIntegrated
TechnologyServices(ITS)andStrategicOutsourcingunitshavesignificantoverlaps,and
withaproposaltomergetheseunits,hundredsofsalesspecialistscouldlosetheirjobs.

ApolloandChromeprojectsIBM,whichhasnotseenitsrevenuegrowsince2008,has
launchedtwoaggressiveinternalprojectstotrimitspayroll.Thefirstone,termed
"Apollo,"isaimedatemployeesfromthelevelofjuniorprogrammeruptomidmanagers.
Unlikeinthepastwhenmanagershadtoidentify"thebottom5%"aspartofannual
pruning,thenewnormistoidentify"thebottom20%."
Thesecondonecalled"Chrome"isaimedatseniorexecutives,ofwhomare150160in
IBMIndia."Around40ofthemcouldeithergetdemotedorletgo,"saidanotherperson
familiarwiththecompany'sthinking.
Insomeways,IBM'seffortstotrimitspayrollandselectivelyhirepeoplewithspecialised
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IBMIndiastaffstillbattletechbluesfearingmorelayoffs|ETCIO

skillsinnewtechnologiesunderscoresatectonicshiftintheglobalITindustry.And
India'ssoftwareoutsourcinggiantsTataConsultancyServices,InfosysandWiprotooare
notimmunetothisshift.IndianITcompaniesonlyadded13,000employeesforevery
billiondollarofrevenueinthe12monthstoMarch2014asagainst26,500employees
theyearago,accordingtoNasscom.ThesoftwareandservicesindustryinIndiaemploys
3millionworkers.
AspartofprojectApollo,thosewithnoskillsinSMAC(Social,Mobile,Analyticsand
Cloud)orevenanalyticsplatformWatson,arebeingaskedtogo.Accordingtopeople
familiarwiththedevelopment,theattritionrateatIBMiscurrentlypeggedataround26%.
"IBMisshrinkingworkforcesnotjustinIndia70%ofcostsinthateconomyarerelatedto
labor.Thatisgrosslyinefficientwhenyoucomparetomodernfactoriesordatacentres,"
saidVinnieMirchandani,atechnologyanalystandCEOofadvisoryfirmDealArchitect.
"IamnotsureIBMoptimiseditsglobaldeliverymodel.ManyoftheIndianvendorswere
disciplinedbycustomerslikeGEtooptimisethatmodel."WhileIBMislayingoff
employees,italsocreatingnewjobsthosemaybefarfewerinnumberandnot
necessarilylocatedinIndia."Inareaslikesocialmarketing,securityandmobileapp
development,IBMandotherfirmsaredevelopingtalentpoolsinnewerglobalregions
andsoarenotasdependentonIndia,"addedMirchandani.

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IBMIndiastaffstillbattletechbluesfearingmorelayoffs|ETCIO

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