TN Hari on tech layoffs: Companies must be generous with severance

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Tech companies hiring aggressively only to find themselves bloated and facing skills mismatches isn’t anything new. But go about layoffs compassionately

January 27, 2023 / 11:39 AM IST

Layoffs are a result of a few factors like long-term shift in trends and short-term pressures induced by certain macro-economic factors.  (Representative image/Shutterstock)

Layoffs are a result of a few factors like long-term shift in trends and short-term pressures induced by certain macro-economic factors. (Representative image/Shutterstock)

Layoffs at some of the large tech companies have been making front page news for a while now. Before coming to this, I’d like to share a personal experience with layoffs. I joined Tata Steel straight out of college in 1988. The company operated in a protected market at that point of time.

Economic liberalisation changed everything in 1991. Overnight, import duties were slashed across a wide range of commodities. On the back of India’s protectionist policies, the domestic steel industry had grown sluggish and obsolete with a bloated workforce. Suddenly, it had to deal with the big boys of global steel who were slim and agile. It was a life and death moment for Tata Steel, the kind it had never experienced ever in its nearly hundred-year-old history.

Layoffs: Tata Steel’s Way

JJ Irani, a complete antithesis of his charismatic and larger-than-life predecessor Russi Mody, had just taken over as the new Managing Director of Tata Steel. He was the perfect leader for a crisis like this. In a company that was considered ‘caring’, and where employee welfare was of paramount importance, he changed the narrative by emphasising productivity and drawing brutal comparisons with similar steel plants worldwide.

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