Last month of the previous year , a frontline company, in the IT industry , Tata Consultancy Services (TCS) handed over “pink slips” to 2574 employees in a bulk. The decision of the company turned out to be highly controversial and faced a lot of criticism and outrage from among the IT workers, democratic unions as well as a couple of media houses. Most of the employees who have been handed over “pink slips” were employees with more than 8 years of experience and were posted as decently high rank employees like associate consultants and project managers and were fetching fat salaries. Justifying their decision of firing these IT workers, TCS has come up with the excuse that their performance was not “up to the mark” for quite some time. On one hand where TCS plans to fire around 30,000 IT workers in the year of 2015, on the other hand it is also preparing 55,000 new recruits to be hired. This has led to widespread insecurity and discontentment among the IT workers.
For our information , just like every other sector of capitalist production and distribution , mass sackings and cuts are not a new phenomenon in IT industry, as companies adopt various tactics and tricks to maintain their profits and to compete with their competitors in market. This results to the arbitrary scales these companies set for measuring the “performance” of the workers and quickly hand over “pink slips” when the workers fail to come up to the mark on those scales. This is not just the case of TCS, last year alone Bangalore witnessed 15,000 IT workers being sacked by various IT companies. The issue of TCS has been in so much news these days only because the “image” of TCS in the industry is that of a company which generally doesn’t get into mass sackings and cuts. And thus , the recent events have downcasted all those who looked upon TCS as an ideal company to work for.
Despite all the excuses given by TCS of “not up to the mark” performance of employees, to understand the truth behind this mass sacking, we must discuss the crisis world capitalism is facing and how it impacts the IT sector. What is “Information Technology” industry and what does it produce ? Infact IT sector is not directly associated with production, rather it deals with the services provided to the production and distribution sectors. It chiefly provided services to manufacturing, banking and financial sectors. Thus the health of IT industry almost fully depends upon the health of the above mentioned sectors. On one hand, for quite some time the share of agriculture on Gross Domestic Produce (GDP) of India has shown a steep fall and the manufacturing sector has witnessed a dismal growth rate , on the other hand expansion of the service sector has increased its share very quickly. By the end of the year 2014, the service sector shared 65 % of the country’s GDP. Further in this , the IT sector had been growing at a rate of 30% till before 2008. A large chunk of profits for the IT sector comes from exports. In the year 2012, 77% profits to the IT sector came from services exported outside. This sector exports its services to upto 60 countries including USA, Europe, Japan, Russia and the Central-East. Two third of its exported services are dependent solely on the United States. Thus it is no rocket science to understand that upto what extent is the Indian IT sector dependent on the economy of the developed countries. This was the reason why the 2008 financial crisis dipped the growth rate of IT sector from 30 % to 15 %. Although , during that time the government of India diluted its effect on the IT sector by increasing the domestic demands by its incentive packages. Plus the fact that cheap services which the Indian IT sector provided as compared
to other countries also diluted the effect of the crisis. But since 2008 when the growth rate of IT sector witnessed the dip from 30 % to 15 %, it never actually recovered back. Since then, until now, it has always remained between 12%-16%. The dismal condition , world capitalist system is facing has led to significant fall in the demands of all sectors including the IT. The economies of Europe , Japan , Russia and Central-East Asian countries which import upto 20 % of the Indian service sector , are on a declining downhill. Also, the IT companies of China and Philippines are giving a tough competition to the Indian IT sector. These conditions have constantly pressurized the Indian IT companies to cut the expenditures and make the services cheaper. Thus , in order to dilute this pressure, the IT companies are constantly trying to develop their technology on one hand and sack the “fat salaried” employees on the other hand.
Many of the TCS workers who have been sacked , had annual salary of upto 20 lakhs. Most of them held high rank posts like associate consultants and project managers. People holding these posts , are not involved in evident or direct work (like software programming or coding) rather they are involved in works like supervision , management and distribution of services. Infact , in IT sector as the experience of the worker increases , his participation in direct and evident work decreases. Now either he must master the job of management and succeed , else he is neither able to deliver technical works (programming , coding etc.) , nor does he remain good for management. In this scenario , he fails to fulfill the expectations of the company ( which continue to grow with time) and is considered as a burden for the company. On the other hand educational institutions running professional courses continue to supply new professionals in huge numbers who can easily learn the new technologies and are easily available for being hired on lesser salaries. Moreover , companies even exploit them for free in the name of “training” for one or two years. In this way companies carry on their layoffs and mass sackings without hampering their work and even cuts the production cost by bringing in cheap labor force. Alongside this , like other sectors , the contractual labor system has also increased in the IT sector which provides the luxury of “hiring and firing” to the companies with convenience.
IT sector was born in India in decade of 1970. TCS was the first Indian IT company. Since its birth , this sector promised the middle class , a golden era and showed them golden dreams. This golden era came too , because the demands of IT services were at its peak for the developed economies, which benefited the IT companies as well as its employees to an extent. Now the IT sector has grown senile and its golden era is in its declining phase. Its a common rule of the capitalist system that it undergoes a stage of boom , and then a stage of deadlock which finally ends up into the stage of slowness and depression. Secondly , layoffs and unemployment are also compulsory evils of capitalism. Unemployment is extremely necessary for the capitalists it acts as an “industrial reserve army of labor” in a capitalist point of view. According to the theory of demand and supply , when supply increases, a surplus occurs, leading to a lower equilibrium price. Unemployment too by increasing the supply of labor in the market decreases the bargaining capacity of the labor , as a result of which cheap labor gets easily available for the capitalists and they are exploited even more blackmailing them that if they don’t do the “desired” amount of work , someone else will be hired in their place.
Another point which must be noted is that even the corporate media is shedding tears for the sacked IT workers. whereas the same media never bothers to broadcast the very often layoffs of the workers in factories and mines who toil under extreme inhuman conditions at their workplace. Today , when media is showing its sympathy towards the TCS workers , it is because on one hand the upper middle class and the middle-middle class is the biggest consumer of capitalism , and on the other hand it is a vociferous supporter of the policies of privatisation , liberalisation and globalisation . So capitalist media will never want to upset them. One more point must be noted that this higher position holding section of IT sector is also a support base of Modi government. The same Modi government which has slackened the already weak labor laws . This has enabled the capitalists to easily “hire and fire” the workers according to their convenience. But this section is still unable to recognize the disastrous effects of the Modi government and is still hoping for the “Ache Din” to come.
The positive here is that the sacked TCS workers have not conceded defeat and have decided to unite and oppose this decision of the government by forming their forum of social network and organizing demonstrations in various cities. It may very well happen that this struggle of the sacked workers may force the company to reappoint a few of the sacked workers but it is very important to understand that this is not just a problem of a particular company or sector, rather a crisis all sectors present in the capitalist establishment for which capitalism is itself responsible. Thus the struggle for immediate demands must extend upto the far-reaching struggle against the whole capitalist establishment. For this the IT workers must form a unity with the working class in its struggles . The only permanent solution to problems like layoffs and unemployment can be achieved by establishing an alternative to this capitalist system.
( This article was originally published in the revolutionary hindi magazine “Ahwan” in its April issue of 2015 written by Akhil , translated by workers resistance team to English . Link to the original article in hindi is http://ahwanmag.com/archives/6164 )
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