India’s 6th largest software exporter, Patni Computers has recently laid an estimated 600 employees. The company claims that this action is due to their non-performance issues. However, industry watchers have mentioned that it is largely due to insufficient projects.
Patni with its delivery centers in Chennai, Bangalore, Mumbai, Pune, Noida and Hyderabad is one of the largest software exporters. During its recent yearly appraisal, the employees were shocked to receive a forced resignation letter instead of a appraisal letter. The company informed this to be an exercise to weed out non-performers.
Executive vice president and global head of Patni Human Resources stated, “This was an absolutely regular appraisal that is important for any performance driven organization. It is something standard we do every year. Employees who have got a 0-1 rating on a scale of 5 typically form the basis for the first-level shortlist. These are performance based resignations; we’ve not issued any termination letters.”
An industry expert from Bangalore mentions, “IT companies have to concentrate on educating business developers. IT companies spend huge amounts on business developers. However, they tend to be inefficient and do not have much knowledge about the product they sell. They either quote too high prices for simple jobs or sign for less when it would actually cost more. Both ways the company either loses the project or ends up in additional expenditure”
Software companies are facing a crisis in recent years due to incapability of acquiring new projects. Laying off employees in the name of performance issues has become quite common among IT companies to cut costs.