56,000 IT jobs in danger? Infosys, TCS say they're not responsible for mess

According to reports, the 7 biggest IT firms operating in India are set to let go of 56,000 workers

In his social media post, an anonymous techie called the recent spate of layoffs in the information technology (IT) sector a "nightmare". The bad news is, the nightmare is unlikely to end anytime soon.

The seven biggest IT companies operating in India, including Wipro, Infosys, Tech Mahindra and Cognizant, are planning to layoff at least 56,000 engineers this year, Livemint reported on Thursday.

According to the report, this projected number is double the amount of layoffs by these companies last year. Mint claims the astoundingly high number was arrived at after "extensive interviews with 22 current and former employees across these seven companies".

The companies concerned are Infosys, Wipro, Tech Mahindra, HCL Technologies, US-based Cognizant Technology Solutions, DXC Technology, and France-based Cap Gemini SA. According to the report, they have denied that the mass layoffs signal a crisis and have attributed the increased layoffs to more rigorous appraisal processes.

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Of course, the news of IT majors handing out pink slips has already been flowing in. On Wednesday, Tech Mahindra let go of around 1,000 of its employees. Tech Mahindra's layoffs, however, were not an outlier; Wipro fired around 500 of its employees in April, and Cognizant has signalled it could let go of close to 10,000 of its employees. (Read more)

However, Infosys has said that it does not plan to cut jobs.

Aside from the Mint report, earlier reports had also suggested Infosys was planning to hand out pink slips to hundreds of its employees at its bi-annual performance review.

According to an Economic Times report, Infosys Chief Operating Officer U B Pravin Rao has said, "I would like to put to rest any speculation around planned layoffs. As has been the case in the past, we will primarily see some performance-based exits." (more)

TCS announces share buyback; Infosys and Wipro may follow

Investors eye a piece of the large cash kitty as growth slows

Barely a week after the US-based software services player Cognizant Technology Solutions, which has several delivery centres in India, announced plans to return $3.4 billion to its shareholders through buyback of shares and dividends, Tata Consultancy Services (TCS), too, said its board would be meeting on Monday to consider a buyback plan.

In a statement to stock exchanges on Thursday, TCS said, “We would like to inform you that the board of directors will consider a proposal for buyback of equity shares of the company at its meeting to be held on February 20, 2017.” If approved, this will be TCS’ first buyback since its listing in 2004.

The Street took the news positively, as stocks of domestic information technology (IT) majors - TCS, Infosys, Wipro, Tech Mahindra and HCL Technologies - were up 1.4-3 per cent on Thursday.

When asked about the company’s capital allocation plans, Rishad Premji, whole-time director and chief strategy officer, Wipro, said, “We did a buyback last year worth Rs 2,500 crore. We have a stated dividend payout ratio policy, which is 40-45 per cent, which we have maintained. We have said that on an annual basis, we actively discuss this within the company and evaluate what makes sense with the cash that the company generates. We are open to evaluating options like buyback, special dividends. It makes sense for the organisation, as we move forward.”

Buybacks are seen as the preferred route over dividends, as they are more tax-efficient. Besides dividend distribution tax at an effective rate of over 20 per cent, dividend income in the hands of all residents, except domestic companies, trusts or funds, also attracts an additional dividend tax of 10 per cent on dividend income over Rs 10 lakh a year. Read more

Azim Premji and Shiv Nadar in Forbes list of 100 richest tech tycoons

Azim Premji and Shiv Nadar in Forbes list of 100 richest tech tycoons

Wipro chairman Azim Premji and HCL co-founder Shiv Nadar are the only two billionaires from India in Forbes' list of the world's 100 richest people in technology, ranking in the top 20 ahead of Google boss Eric Schmidt and Uber chief executive officer (CEO) Travis Kalanick.

The '100 Richest Tech Billionaires In The World 2016' list has been topped by Microsoft founder Bill Gates with an estimated fortune of $78 billion. Premji ranks 13th on the list, with a net worth of $16 billion and Nadar comes on the 17th spot, with $11.6 billion of net worth. Indian-American technology czars — Symphony Technology Group CEO Romesh Wadhwani and founders of IT (information technology) consulting and outsourcing company Syntel Bharat Desai and his wife Neerja Sethi — are also on the list. Forbes said Premji, who heads India's third-largest outsourcer, Wipro, has been on a buying spree in the past year to boost growth. Premji's son Rishad, who heads strategy and sits on the board, also oversees Wipro's $100-million venture capital fund. Nadar co-founded HCL, which is reportedly mulling a US listing, Forbes said, adding Nadar also owns HCL TalentCare, a skills-development firm. His latest venture is a $500-million fund to invest in startups and US health care technology firms.(more)