IBM denies sacking of 5000 employees; calls it 'factually inaccurate'

IBM on Wednesday said media reports about the company firing 5000 employees were factually incorrect and that it was in the process to re-skill and rebalance its employee workforce.

Various media reports on Tuesday had said the technology giant was laying off 5000 employees in India, joining other IT firms like Cognizant, Infosys and Wipro which have resorted to jobs cuts this year.

"This is factually incorrect. We are not going to comment further on rumors and speculation. Re-skilling and rebalancing is an ongoing process as we accelerate the benefits of cognitive and cloud technologies for clients around the world," a spokesperson for IBM told the Economic Times.

However, the government on Tuesday said IT industry has assured it that there will be no large scale job losses in the technology sector which continues to demonstrate 8-9 per cent growth.

IT Secretary Aruna Sundararajan said there could be some cases were contracts are not renewed as part of the regular annual appraisal cycle.

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Besides, she said, the industry is also undergoing a shift in the job profile given the advent of cloud, big data and digital payments.

Sundararajan added: "As part of annual appraisals , they may not be renewing contract of some people but it is absolutely incorrect to assume that suddenly this year a large number of jobs are being shed."

The government has categoric assurance from the industry in this regard, she emphasised.

The industry is growing at 8-9 per cent and there is nothing to suggest that the growth is going to slow down "dramatically".

IT sector, she said, will continue to hire and has added 5 lakh jobs in the last 2.5 years. The issue needed to be looked at "holistically", she added.

Over the past few weeks, there have been reports of layoffs across the IT sector. Tech majors like Wipro, Infosys, Cognizant, and, more recently, Tech Mahindra have initiated annual performance reviews, a process that weeds out bottom performers or non performers.

There are fears that thousands of employees in the sector could be shown the door over the next few weeks.

The development comes at a time when Indian IT firms are facing challenges in the business environment and stricter work permit regime in countries like the US, Singapore, Australia and New Zealand.

That apart, executive search firm Head Hunters India said recently that job cuts in IT sector will be between 1.75 lakh and 2 lakh annually for next three years due to under- preparedness in adapting to newer technologies.

A McKinsey & Company report also said earlier this year that nearly half of the workforce in the IT services firms will be "irrelevant" over the next 3-4 years.