Saturday, November 01, 2008

Kerala Government and News Media – Out of Touch With Reality or Hidden Agenda?

One of the software companies in Technopark in Kerala laid 120 employees off last week. It is also reported that few other companies are doing the same. During this time when the whole world is facing a possibility of a huge economic recession laying off 120 people should not even become a news.

But that is not the case in Kerala. This was widely reported in most of the newspapers. The labor minister P K Gurudasan has ordered the labor department to “take stringent action against those companies after examining the issues connected with entrenchment of employees in Technopark” and this is major news in most of the Malayalam newspapers. 

The papers are giving the picture that these companies are committing some crime by laying off these people. Here is the piece of news that appeared yesterday from Mathrubhoomi, the second largest newspaper in Kerala. They are reporting about the lay offs in Technopark and in one paragraph they are talking about pink slips. Since people residing in Kerala know only about unionized jobs where you can never been shown the door how ever ineffective you are, the newspaper is explaining how the pink slip works. To read the Malayalam version click the picture below.

The rough translation in English “the method used by one of the companies (in Technopark) to lay off people has been widely criticized. At the end of the day’s work the employee to be laid off will be asked to meet with the human resource manager. He will tell the employee that the company is in financial crisis and cannot support you anymore paying you high salary. He will be asked to give the resignation letter. The identity card is seized and the fired employee will be asked to vacate immediately. The fired employee is not even allowed to say good bye to his colleagues nor allowed entry into the office again.” 

All I have to say to Mathrubhoomi, other news papers, Ministers, LDF and others who are making this a huge issue – This is not something that is happening in Kerala and it is happening through out the world. If the fired employee is capable he will find a job in the same field but if he is not he will have to struggle. Only fittest can survive in this competitive world. 

Anyone who joins the IT industry with huge pay package knows very well how volatile this job market is. If the market goes south or if you are not ready to constantly polish your skill set you are out of job. This is the price you pay for the high salary and other perks. When the company hires you one must be prepared to be fired any day on the will of the company. That is whole dynamics of this industry. If you cannot take that hiring and firing then this job is not for you – better get a government job and government supported labor unions will support you from any lay offs however inefficient you are. 

I fear there is a hidden agenda in the Labor Minister asking labor department to look into these lay offs. The communist party is trying its best to establish some kind of union for IT workers in Technopark for a long time. This is the only area in Kerala where communist party has failed to unionize. They have destroyed most of the industry with their militant trade unions. They need some issues to get into Technopark and they may use this to do it. 

If communist party, LDF and government try to unionize the IT workers and impose strict rules on companies, Kerala is going to lose big time. This slow down is a passing phase and things are going to come back to normal again. But the companies fearing strict labor laws will never invest in Kerala’s IT field. Also those who are here will move out. 

Don’t get shocked if you hear one of the communist guy or our media make such a statement in the near future. 

IT companies in Technopark are colluding with American imperialist to lay off poor Keralites from their jobs.

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Anonymous keralafarmer said...

"better get a government job and government supported labor unions will support you from any lay offs however inefficient you are."
100% correct.

November 02, 2008 12:04 AM  
Anonymous Anonymous said...

Have you seen a bigger new Jet Airways laid off 1000 people and was FORCED by all govts (Maharashtra and Union Govt - which is ruled by Congress) to take them back in an yes they took them back in. India is not America.It has different rules. I dont know why you missed that news and instead pick a bone with the LDFs govts reaction.


November 02, 2008 1:11 AM  
Anonymous Praveen said...

Senseless Brainless!
Your blog doesnt deserve comments!!! Please dont insult our intelligence Mr.Brijesh


November 02, 2008 1:48 AM  
Blogger ശ്രീ @ ശ്രേയസ് said...

I am with you Brijesh. You said it very well.

I read that whoever laid off has been given a few months salary, which is line with the rules. What else can we demand legally?

This is just the beginning, and we can expect the same from other companies as well, just the matter of time.

People always want to be in the comfort zone. Nobody in the world can guarantee anything. If someone loose job, its their turn to struggle and find a better place to fit them. Thats what life is all about.

IBS is the Kerala based company grown much better than expected, even with its roots in Kerala. Now they have acquired foreign companies also. We need to think whether we need the company and the rest of the people to survive by laying off a few under performers.

IBS could have made this much clear with a press release describing the reasons and could have avoided rumors. (They are not a listed company yet, so they don't need to.)

November 02, 2008 3:08 AM  
Anonymous KeralaTips said...

Politicians are looking for the tiniest excuse to get in everywhere and dictate it. For example, they are trying to get complete control of police force to the point of making it a party subsidiary!

I have a better solution. Hand over all the companies to Kerala Government and let us see what happens :-)

November 02, 2008 3:52 AM  
Blogger അങ്കിള്‍ said...

At last the Minister himself has come up with a defending statement that those employees were on probation and they will become regular only on successful completion of probation period. Those unsuccessful will have to go out. That is the accepted policy.

If such statements were not made by some one responsible from Govt., there would have been serious repercussion from Smart City people.

November 02, 2008 8:09 AM  
Anonymous Anonymous said...

It is the way that is being criticized..For years you were serving a company and next hour you are shown to the security guy as a culprit.
There are many companies in technopark which are not giving salary properly, but no one is complaining. Everyone understand that there is recession salary will be once in two months and all are happy since they have a job. Its a win win situation, the company will then be like a family...
Will you leave your family members if you are hit with a financial crisis? No you just eat once per day till this is over.
The issue here is on one hand ibs is constructing new buildings and on the other hand they are firing employees without any information conveyed before that. The situation of all employees are of panic.
This happened because ibs had no prior knowledge as of how to lay off people..

November 02, 2008 8:44 AM  
Anonymous Siva said...

India is different from United States. Companies should be cautious when they hire people whether they can support the recuits for a long time. It should not be easy for companies to layoff people when going is tough while they made so much money during good times. ours is a country of one billion people and we should welcome the big corporations on our terms not based on perceived policies of thiers. companies be made aware that laying off people is not a first but last option when they come to India. All political parties and the Government of India should make sure that this happen in India.

"Dont blindly follow whatever the United States does". Make rules that is suitable for us and allow companies to enter based on those rules.

November 02, 2008 6:04 PM  
Blogger Karthikeyan said...

Though i can appreciate your disgust with the communist party in kerala, i am not sure if you can say unions per se is not good. Why should it be always be easy for a company to hire and fire at will without any reason. As siva has alluded, India and US are different. I don't agree with your high pay logic, our IT guys put in more than the 8 hours required of them for that kinda pay.

Also, in a country like ours where laws aren't so clear (or not so effective) to employees to fight against unlawful termination, i do think there should be avenues for employees to represent their interests. In fact, i do think the IT guys should come up with movements to protest against them being required to work for more than 8 hours a day without adequate overtime compensation. Just because they get paid a little more than other industries does not mean they give up their rights to protection under our labour laws.

I am for firing ineffective/unproductive employees. But, i don't want the mercantile class to have the ability to get away with anything.

November 02, 2008 10:24 PM  
Anonymous Dony said...

You cannot compare apples and oranges!
In US, a laid off employee gets severance pay based on the length of his service in the company and weekly unemployment insurance from state govt till he gets another job.
In India, severance pay and unemployment insurance are for namesake; if at all those are given, not enough to support the laid off employee reasonably.

November 03, 2008 4:13 AM  
Anonymous Anonymous said...

Subject: FW: IBS in the News - Our Side of the Story

V K Mathews/IBS

Dear All,

For the first time in its 11 years of existence, IBS has, unfortunately, been in the news for the wrong reasons. I am writing this to you to offer our side of the story, which has largely gone unreported. The enormity of the media coverage over the weekend demonstrates the importance of this issue, the importance of IBS as an organization and the expectation of public from IBS. We will issue a Press Note today to clarify the situation and I will also speak to select channels.

I am structuring this mail as a set of questions and answers with the hope that I can convey the message to you all as clearly as possible.

Is IBS planning to lay off staff?
No, we are not. On the contrary, we are recruiting staff, though at a relatively slower pace now because of the economic recession. We will have to recruit a lot of staff to support the growth going forward.

If not lay off, what was going on last week? Why were employees sent out?
It is true that IBS has terminated the services of 27 employees last week. This is about 1% of the staff that we employ today. This action was based on performance of the staff in question, and our assessment of their potential to turn around. Performance has many dimensions; it is not just technical or business capabilities that are counted. A person who may be lacking many things, but not lacking in his attitude to be positive and supportive will always make it. We uphold this principle in IBS.

How did we decide on the list of this people?
Performance appraisal, mangers’ feedback, and multiple iterations by managers to make sure that the process is as objective and fair as possible. No company and its managers would have spent so much time and effort as we did to make sure that what we do is as fair as humanly possible; you can believe me on this.

Is the termination process completed, or will it continue?
Yes, we have completed this process.

This exercise was done as part of a global initiative that IBS has undertaken recently – the Cost Rationalization Program. One of the key elements of cost rationalization is resource rationalization, which means that among its 14 global centers, IBS should maintain the right number of resources with the right skills at the right place. Performance management is fundamental to resource rationalization and the company has decided to exercise it.

Employees have been summoned and asked to leave immediately. Is this fair?
This is a very difficult one. An employee whose services are terminated is generally asked to leave the office as an IT security measure to ensure that the data, information and systems of the company and its customers are protected. This is the normal practice followed by the industry. In an IT Company, an emotionally affected employee could cause a lot of damage, and it is the responsibility of the company that it does all it can to protect the assets. As you know, we maintain and support the mission critical applications of our customers. I know, IBS employees will not do any such harm, but that is my personal belief. Legally, and process point of view, we are however duty-bound to take IT security measures, and if we don’t, it will be termed as gross negligence. This is a difficult call for the company and for its managers. This is not what a company like IBS would have liked to do, but we have to do this as a safeguard measure. I would like to reiterate that we did not do it as a sign of disrespect to our employees; it is just that we are duty-bound to do this. The departing employee has done no harm to the company, and IBS is only grateful to them for their support and goodwill.

IBS was always known as an employee friendly company, which did not sack any employees even in worse situations (2001). Has the company changed its culture and values?
No, we have not changed our culture, and we will not. I believe that IBS’ strength is its culture and core values. Our culture is our DNA. We are not a ‘hire and fire’ company. I believe that we get the best from our team when they feel secure and not otherwise. However, we must accept the following realities of life and business.

In spite of best efforts, it is not possible to have the right fit between the job requirement and all the employees of the company, especially when we recruit a lot of people. A certain degree of churn and realignment will therefore be required, and it is good for both the employee and the company.
A person who is not found suitable by IBS does not mean that the person cannot perform in another company; it could be that the skill/job fit, the environment or context that could be the issue.
A non-performing employee will find the going difficult and is prone to developing undesirable attitudes, which will not help the employee or the company.
There is quite a lot that the company has to do and the company will do to help people in question to improve their performance.
Is IBS financially sound?
IBS is financially sound and strong. We take decisions which are informed and considered. Our business is fast growing and expanding. When the Indian IT industry is forecasting an average growth rate of 20-25% this year, IBS will grow over 50% this year. We are finalizing the business plan for the next financial year and we are seeing robust growth of over 70%.

Did we terminate these employees to show more profit before IPO?
IBS is planning an IPO, probably in 2010-11. But this is not the consideration for discontinuing the services of the 27 employees. The reduction in the salary outflow is only Rs. 10 lakhs per month as a result of 27exits, whereas the total salary payment is Rs. 21.36 Crore per month! Therefore, the news that the termination is borne out of compulsion to show more profits before the IPO is incorrect. IBS has recruited 165 employees during Q2 (Jul-Sep 2008) itself, increasing the cost.

The average salary of the 27 staff who had left us is Rs. 37,600, where as the average salary of IBS staff worldwide is Rs. 99,400, and average salary of India based staff is Rs. 50,600 per month. So, we are not sending out expensive staff as was mentioned in one of the media.

Will the economic downturn affect IBS?
Like any other company, we are no exception. The economic and financial performance of the world is so much inter-related that every entity within it will feel the tremor, but the degree of impact will vary depending on the preparedness of the company in question. Our ability to absorb shock without damage depends on our financial strength. IBS is financially strong, perhaps, stronger than many blue chip companies in our field, but we don't want to be complacent and stupid; we must do everything to control our costs and preserve cash. We must improve our productivity and spend less during these testing times. All of us have a role to play here. The Cost Rationalization Program that we have initiated is intended to strengthen our position on this front.

In real terms, how does it impact IBS? When the economic crisis deepens, our customers will reduce their spending, especially capital spending on big IT projects which deliver value over the long-term. This could mean that projects are delayed or cancelled, and this means a reduction in the demand for projects, but the supply still remains, which causes pressure on price and thereby on margins of suppliers companies. Many Indian companies are already affected, but IBS is not yet affected in tangible terms, but we should be prepared. One advantage that we have is because we are a products company, and if a customer wants the IBS product he does not have an option to go to another supplier, where as in the case services companies, it is relatively easier to select a supplier who offers a lower price.

IBS a Case Study...
I have mentioned this several times over… IBS is a case study of the commitment of its employees. We have built this company from almost nothing… 55 staff, with hardly any experience, operating from a small office in Technopark in 1997. Today, we operate from 14 global locations; we compete with the best and largest companies in the world; our clients are the best brands in the industry; we acquired 5 companies in the last 6 years; we are truly a multinational and multicultural company; our investments and strategies have proven right; we are poised to become a leading supplier in the TTL space. We are committed to developing our staff; we remain committed to the society and we will fulfill our social responsibility; IBS will remain an ethical and fair company and will treat its employees with respect and dignity.

Our future is dependent on our ability to deliver value to our customers in terms of innovation, quality and cost. We are competing with the best and brightest in the world. This is challenging, yet very exciting. We need lot of young leaders and innovative leadership. IBS has a lot to offer to its bright employees. IBS is one of the best paying companies in the country, and we want to continue to be like that.

Personally, it was a sad weekend for me to see all those news coming up in the channels. It is unfortunate that a company with such impeccable business, social and employee track record is now subject to attack without any valid reasons. It has been an unfair and one sided trial, without collecting any information from the company. When Governments and related agencies worldwide is doing everything possible to safeguard companies and financial institutions during this period of acute economic crisis, it is unfortunate to see such campaigns against respectable and socially responsible companies which create thousands of high quality jobs in Kerala.

And Finally...
The times may not be the best, but for us there are lots of opportunities there. We must stay together and pull together to convert this position of disadvantage to a position of opportunity, and we will. The strength of a company is tested not when the going is good but when the going gets tough. The right decisions may not be the most popular ones, but they are the decisions to be taken. We need to ask ourselves to see if we function as responsible officers of the company, and what responsibility means. A responsible person takes difficult decisions, yet right decisions for the larger interest of the community. Can this company grow to become a dream company if we do not create a cohesive team of competent, responsible and sincere group of people working towards a common goal? I repeat my message, performance has many dimensions; we may be lacking in many things, but it is our attitude and commitment which takes us there.

I take this opportunity to thank you all for the great work that you are doing and I am sure, with your support, we will achieve the goals that we have set for ourselves.

Onwards & Upwards,

V K Mathews
Chairman & CEO
The IBS Group

November 03, 2008 8:54 AM  
Anonymous Praveen said...


ടെക്‌നോപാര്‍ക്കിലെ പിരിച്ചുവിടല്‍ നിയമവിരുദ്ധം

തിരുവനന്തപുരം: ടെക്‌നോപാര്‍ക്കിലെ ഐ.ടി കമ്പനി ജീവനക്കാരെ പിരിച്ചുവിട്ട നടപടി നിയമ വിരുദ്ധമാണെന്ന്‌ തൊഴില്‍വകുപ്പ്‌ നടത്തിയ അന്വേഷണത്തില്‍ കണ്ടെത്തി. പിരിച്ചു വിട്ടതിനെതിരെ നിയമ നടപടിയ്‌ക്ക്‌ ശുപാര്‍ശ ചെയ്യുമെന്ന്‌ അഡീഷണല്‍ ലേബര്‍ കമ്മീഷണര്‍ അറിയിച്ചു.

പിരിച്ചുവിട്ട ജീവനക്കാരില്‍നിന്ന്‌ തൊഴില്‍ വകുപ്പ്‌ തെളിവെടുപ്പ്‌ നടത്തും. 27 ജീവനക്കാരെയാണ്‌ പിരിച്ചുവിട്ടതെന്നും അന്വേഷണത്തില്‍ കണ്ടെത്തിയിട്ടുണ്ട്‌.

ജീവനക്കാരുമായി ബന്ധപ്പെട്ട പല രേഖകളും അധികൃതര്‍ നടത്തിയ പരിശോധനയില്‍ കണ്ടെത്താനായില്ല. ഇത്‌ നിയമ ലംഘനമാണെന്ന്‌ അഡീഷണല്‍ ലേബര്‍ കമ്മീഷണര്‍ പറഞ്ഞു. കമ്പനി അധികൃതരുമായും ജീവനക്കാരുമായും തൊഴില്‍വകുപ്പ്‌ അധികൃതര്‍ ചര്‍ച്ച നടത്തി.

Now what is your response for this Brijesh?!!!

November 03, 2008 1:04 PM  
Anonymous Praveen said...

ടെക്‌നോപാര്‍ക്കിലെ പിരിച്ചുവിടല്‍ നിയമവിരുദ്ധം

തിരുവനന്തപുരം: ടെക്‌നോപാര്‍ക്കിലെ ഐ.ടി കമ്പനി ജീവനക്കാരെ പിരിച്ചുവിട്ട നടപടി നിയമ വിരുദ്ധമാണെന്ന്‌ തൊഴില്‍വകുപ്പ്‌ നടത്തിയ അന്വേഷണത്തില്‍ കണ്ടെത്തി. പിരിച്ചു വിട്ടതിനെതിരെ നിയമ നടപടിയ്‌ക്ക്‌ ശുപാര്‍ശ ചെയ്യുമെന്ന്‌ അഡീഷണല്‍ ലേബര്‍ കമ്മീഷണര്‍ അറിയിച്ചു.

പിരിച്ചുവിട്ട ജീവനക്കാരില്‍നിന്ന്‌ തൊഴില്‍ വകുപ്പ്‌ തെളിവെടുപ്പ്‌ നടത്തും. 27 ജീവനക്കാരെയാണ്‌ പിരിച്ചുവിട്ടതെന്നും അന്വേഷണത്തില്‍ കണ്ടെത്തിയിട്ടുണ്ട്‌.

ജീവനക്കാരുമായി ബന്ധപ്പെട്ട പല രേഖകളും അധികൃതര്‍ നടത്തിയ പരിശോധനയില്‍ കണ്ടെത്താനായില്ല. ഇത്‌ നിയമ ലംഘനമാണെന്ന്‌ അഡീഷണല്‍ ലേബര്‍ കമ്മീഷണര്‍ പറഞ്ഞു. കമ്പനി അധികൃതരുമായും ജീവനക്കാരുമായും തൊഴില്‍വകുപ്പ്‌ അധികൃതര്‍ ചര്‍ച്ച നടത്തി.

Now what is your resonse for this Brijesh?

I know your answer: " America is not doing such things. so why the hell should we do all this non-sense."

November 03, 2008 1:45 PM  
Anonymous Anonymous said...

Praveen, you are nothing but a retard with absolutely no knowledge about how IT companies work.

November 04, 2008 6:30 PM  
Anonymous Praveen said...

FYI Mr.Anonymous.

I am an ex-Infoscion(Infosys employee)I worked in TCS aswell. If you dont beleive, you can check with Brijesh. He is my close friend and collegemate.... Like Brijesh, I quit IT and am with my own field, Civil Eng.

The matter I am trying to convey is nothing but this.
It is not a crime for any government to intefere in any citizen,s issues. The newspaper is trying to project the way people is been fired...

November 05, 2008 2:09 AM  
Anonymous Anonymous said...

ivide nooru kanakkinu peru jali nshtapettu thendunnu. noone is recruiting. palarum kalyanam nischaichavar, familiyullavar..
irangi poda thayoli. ninakku amerikkayil irinnu sayippinte kunna nakkiyaal amathi. athu cheytho

November 05, 2008 3:10 AM  
Blogger Brijesh Nair said...

Anon @ 8.10 PM

This shows your standard. At least you should have the balls to identify yourself.

November 05, 2008 3:12 AM  
Blogger silverine said...

@Brijesh: You are right Brijesh! We have to let go of the Govt job mentality and when we take a private job we should be aware of its advantages and disadvantages. Since a pvt sector job is not permanent, employees should save and be financially and mentally prepared for the same. Besides if you do not want to work hard then avoid the pvt sector where every billed minute counts for the employer. Most people rush to the pvt sector for the salary only. Attrition in Indian companies are very high as employees keep shifting jobs for getting better pay hikes. Then how can they expect the companies to be loyal to them?

November 05, 2008 6:05 AM  
Blogger kochuthresiamma p .j said...

very good post. wish u'd send it to a malayalam daily.
the efforts to unionise IT workers have been going on for some time but somehow nothing substantial has happened in that direction. but wait till these LDF guys sit in the opposition-then they'll start putting stubling blocks in the IT sector, get a few companies to leave the state - and when they come back to power 5 years later(v possible - that being the pattern in kerla) they'll offer all sorts of sops, make compromises to woo them back- like they did in th case of smart city.
when are the people of kerala going to give these sick fellows a trouncing that'll teach them a lesson they'll never forget?

November 07, 2008 12:04 PM  
Anonymous Anonymous said...

i wish they shut down all industries / tourism sector ever thing in kerala :) every businesss and they shudnt be allowed to work outside kerala :) ...
then itll be fun...
then it can called as a failed model to be schools..itll be like a zoo :)

November 11, 2008 2:26 PM  
Anonymous Anonymous said...

@Dony - "In US, a laid off employee gets severance pay based on the length of his service in the company and weekly unemployment insurance from state govt till he gets another job."

And for that a US citizen pays a heavy tax deduction from his salary. Will you allow that here? There is no such thing as a free lunch Sir!

November 16, 2008 5:32 AM  
Anonymous VJ said...

Discuss this issue and other relevant Kerala Business issues now on the Linked-In Kerala Business Club:
A new forum for Malayalee Business people..

November 26, 2008 9:41 PM  

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