Employee Unions Slam IT Companies For Delaying, Cancelling Bonuses, Incentives: “Nothing Short Of Theft!”
Latest reports revealed that the country’s Information Technology (IT) sector Employees’ unions are not happy with the latest cost-cutting measures taken by technical firms.
No Reason Justifies VPI Cuts
These measures involve reducing the average variable payout of its staff in the name of optimising the wage bills, as the former terms the move as “nothing short of theft”.
According to the unions, no reason justifies the recent announcements made by the IT giants in the country calling for cuts or delays in performance-linked incentives given to the employees.
Further adding that it doesn’t take into account the consideration of employee welfare.
Restricting Operational Expenses
It seems that major tech firms are resorting to cutting down perks in the name of restricting operational expenses.
In their defence, IT firms say that the high attrition rates in past quarters have led to increased employee costs which subsequently impacted their operating margins.
Further arguing said that the ongoing geopolitical concerns have created greater uncertainty for trade and commerce.
But, it seems not to be acceptable by IT unions, as they increasingly want the government to play a role in safeguarding employee interests.
How Did This Happen?
This all started when India’s second-largest IT services provider, Infosys, announced a deduction of 30% in the average variable pay of its employees for the June quarter at the start of the month.
Justifying, TCS said that margin squeeze, owing to high employee costs, had prompted the Bengaluru-headquartered firm to take the decision.
The IT firm has delayed quarterly variable compensation payout for some employees by a month.
Similarly, Wipro also held back the variable pay of its staff.
According to the industry experts, among the reasons behind the latest cost-cutting measures announced by IT firms is the talk of impending recession within US and European economies, the fear of which is making the second half of the year a challenging one for India’s IT sector.
Besides this, global concerns involving the Russia-Ukraine conflict and China-Taiwan tensions also hold the potential for upending the domestic IT industry.
The president of Pune-based Nascent Information Technology Employees Senate (NITES), Harpreet Singh Saluja said, these reasons, however, do not “justify” the cuts or delays in average variable payouts for tech employees.