India’s four million IT employees have received support from an unlikely quarter. The All India Bank Officers’ Confederation (AIBOC), which has over 285,000 members, denounced the large-scale layoffs in the IT sector and warned of a cascading impact on the rest of the economy.
In its statement the AIBOC said: “We must understand that when people are unemployed in large numbers, it hurts the rest of the economy, creating a cyclical problem. Again, when companies suffer because of lost business, they might in turn be forced to make layoffs of their own, making the unemployment rate rise and overall spending drop even more leading to further loss.”
Over the last five years, urban consumption has remained strong because of India’s strong six million middle-class white collar workers. India’s information and technology sector employs over 40 lakh people and mass layoffs in this sector would impact other sectors like banking, too.
All the major information technology giants have denied any mass layoffs and said that the separations were over performance issues. In its statement, the AIBOC said: “We can very well understand that the IT companies have awarded lower ratings to the employees to prevent any possible labour litigation over the layoffs.”