Layoffs aren't desirable, but can't be avoided: Infy co-founder Kris Gopalakrishnan

Layoffs are not desirable, but they cannot be avoided in a high-growth industry like IT, Infosys co-founder and Axilor Ventures chairman Kris Gopalakrishnan said in Mumbai on Thursday amid tech companies letting go of employees in droves over the past year amid global headwinds.  

On Thursday, he said the IT industr employs 5,00,000 people and has been adding employees on a net basis for the past 40 years

“Today, the IT industry employs 5 lakh people and hires around 2 lakh people every year. If it’s laying off 1.5 lakh people, why are we even talking about it? Of course, it affects the individuals (who were laid off). So, we have to look at how to help them and do it in a humane way,” he said at the Great Place To Work ‘FOR ALL’ Summit.

The global tech sector has seen more than 2,00,000 employees get laid off since 2022, according to tech layoff tracker Layoffs.fyi. A long list of tech gians such as Facebook, Google, Amazon and Microsoft account for a chunk of the losses amid an impending recession in the US. The cascading effect means that several thousands of tech employees in India, across startups and legacy organisations, have also been affected.  

Besides, the situation in India is expected to be grim for a few months at least. The most recent Naukri hiring index for January 2023 shows job growth in the Indian IT sector has declined by 25% over same time last year. Hiring intent declined across both large IT giants and unicorns, with fresher hiring facing the biggest slump followed by a mid-experience hiring decline.  

Pointing out that businesses and institutions far outlive human beings, Gopalakrishnan said the best measure of an organisation’s success is its longevity, making it crucial to ensure the organisation and society survive.  

From an organisation perspective, it’s important to look at the reason for the layoffs, he added. “If the company board or CEO decides to cut 10% of expenses, the easiest way to do it is to cut 10% of the workforce and you immediately meet your goal. That’s mechanical and indiscriminate and could cause damage far beyond what you expect. On the other hand, if the layoffs are necessitated by changes and if you it in a humane way, it’s not desirable but it cannot be avoided.”  

But it can be handled in a humane way by retraining the laid off employee, helping them find other opportunities, building for these exigencies into the financial plans, he pointed out. “Don’t set wrong expectations by saying your job is life… The leadership has to behave properly and take the larger pay cuts (so as to retain some people).”

From an employee perspective and addressing the negative sentiment about job security today, he said: “You can’t say, “Whatever I do, I must be employed". It won’t work in today’s competitive world. But these things have to be handled humanely and minimise the hurt we are causing. It’s important to have a good talk about it.”

Laid-off employees have been taking to social media to talk about the ways in which their employers fired them.  

Also Read: India will need 30 million digitally skilled professionals by 2026: Report