Indian Tech Workers Are Increasingly Facing Layoffs and Demotions

Jun 26, 2017

For years, a handful of Indian information technology companies have become the go-to tech support proxies for U.S. businesses. Chances are if you work for a large American company and call tech support, you end up talking to someone in Bangalore or Mumbai or Pune.

As a result of that booming demand, Wipro (wit), Cognizant (ctsh), Infosys, and Tata Consulting Services, among others, went on a hiring binge to bring on the technically proficient workers needed to work phones and keyboards to support far-away customers.

But more recently, those same companies have been doing the opposite: They've been laying off or demoting employees.

One contributing factor is that American companies, which turned to outsourcing to cut costs, are under pressure from President Donald Trump to hire American workers, according to The Washington Post. Trump has blasted U.S.-based companies for using H1-B visas to bring in foreign workers to take software development and other tech jobs that, in his view, should go to Americans.

Some of the Indian companies, like Infosys, have ramped up hiring in the U.S. to address this concern. If American companies need to hire Americans, InfoSys will have Americans available—at least that seems to be the thinking.

Related; Don't Blame China for Taking U.S. Jobs

Given Trump's tough talk on immigration and outsourcing, it seems likely the topics will come up during his meeting with Indian prime minister Narendra Modi scheduled for Monday.

But political concerns may not be the primary issue here. Tech support workers perform many tasks, like updating customer software, which are being automated, according to The New York Times. It could well be that in tech services, as in the manufacturing sector, more job loss is due to automation rather than outsourcing jobs to lower-cost countries.

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To be clear, layoffs are not completely new to Indian outsourcing giants. What seems different in recent months is the pace of such cuts.

As Gartner (it) research vice president Sandra Notardonato told the Times: “What we’re seeing is an acceleration in shedding for jobs in India and an adding of jobs onshore.”

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