India's third largest software exporter HCL Technologies has laid off 350 employees globally who were working on its client Microsoft’s news-related products, signalling an increasingly tough business environment. The employees were informed about the same in a town hall last week, people familiar with the development said.
These employees were laid off from across geographies including Guatemala, the Philippines and India to name a few. The last day of work for the employees will be September 30 and they will be offered severance pay.
“Microsoft had an issue with the quality of work. We used to monitor, curate and edit content for its news platform MSN from across countries like India, Europe and the US. They had recently automated the process as well for global news monitoring. Prior to this, two years ago, Burda Media was managing this site,” one of the employees who was laid off told Moneycontrol seeking anonymity.
There are also other functions and products like trending on Bing, Geopolitical news curation, comment moderation, tabloid hit apps, and transformation by Teams which have gotten impacted.
People with knowledge of the matter added that the contract with HCL Technologies has ended and it is likely to be passed on to some other vendor. Accenture might be in the running for the same, a source said, but Moneycontrol was not immediately able to verify this. In a similar fashion, Burda Media too had laid off around 200 employees when its contract was over.
“Our Technology & Services vertical continues to see robust growth and is one of the fastest growing segments for us,” an HCL spokesperson said in a statement to Moneycontrol’s detailed queries, offering no comments on questions related to layoffs.
This comes at a time when Indian IT companies are already seeing margin pressure due to inflation and impending recession in markets like the US and Europe, the biggest markets for the sector.
The development also indicates the ongoing business slowdown, budget and target readjustments by Big Tech including Microsoft, Google and Meta.
Coping mechanisms
Dealing with macro headwinds, Microsoft was among the first Big Tech firms to lay off about one percent of its total staff strength of 1.8 lakh in July, followed by 200 more in August. CEO Satya Nadella called it a part of his realignment. The company also updated its revenue targets.
Meanwhile, Google CEO Sundar Pichai also hinted at layoffs to make the company 20 percent more efficient recently after an internal warning to employees to improve performance. Meta too had slowed down investment pace into newer projects amid a revenue drop.
Overall, all the Big Techs have significantly cut down on hiring. According to a report by Xpheno, in India, across Meta, Apple, Amazon, Microsoft, Netflix and Google, collective active job openings were below 9,000 in August as compared to the typical collective openings of over 40,000. Amazon still was an exception with moderate-to-above-moderate level of hiring action.
Within the top three IT companies Tata Consultancy Services (TCS), Infosys and Wipro there were either delays or partial cuts in variable payouts of employees, especially for senior employees for the April-June quarter. Interestingly, HCL Technologies, however, didn't have any variable pay related issues while also offering hikes to employees, several workers told Moneycontrol.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Exclusive interview: 'Southern states will be a big surprise,' says PM Modi
May 13, 2024 9:05 PM
PM Modi's Patna visit: From serving langar to historic roadshow
May 13, 2024 5:13 PM