Infosys Layoffs: Nasscom Defends Tech Industry’s Hiring Practices Amid Controversy

Tech Industry Operates on a Performance-Driven Model, Says Nasscom

The National Association of Software and Service Companies (Nasscom) has defended the Indian technology industry’s hiring practices following the controversy over Infosys laying off around 400 trainees from its Mysuru campus. The software industry lobby stated that the sector operates on a merit-based hiring system, with rigorous training programs designed to equip freshers with high-tech skills needed for evolving client demands.

Nasscom’s response comes amid rising concerns over employment stability in the Indian IT sector, particularly after aggrieved Infosys trainees approached the Central Labour Ministry seeking intervention. However, the Karnataka Labour Department has cleared Infosys of any labour law violations, stating that trainees are not classified as full-time employees and are therefore not subject to layoff regulations.

Infosys Layoffs: What Led to the Controversy?

On February 7, Infosys reportedly terminated 350-400 trainees at its Mysuru campus after they failed the company’s assessment tests three consecutive times. This group represented nearly half of the trainees onboarded in October 2024, following a 2.5-year-long delay caused by macroeconomic challenges that led IT companies to freeze hiring and delay onboarding.

• Infosys stated that removing underperforming trainees was a standard practice to maintain quality in its workforce.
• The company claimed that impacted trainees were provided counseling, transport, and accommodation assistance.
• Employees, however, challenged the decision, arguing that delays in onboarding had already put them at a disadvantage, affecting their ability to clear the tests.

The Karnataka Labour Department’s investigation, completed on February 27, ruled in favor of Infosys. Officials clarified that since the trainees were not full-time employees but apprentices, labour laws concerning layoffs did not apply.

“They were all only trainees, and some underwent training for three months. We cannot call it a layoff. These labour laws are not applicable in such cases. A layoff applies only when there is regular employment. There is no employer-employee relationship at all,” a source from the Labour Department stated.

Nasscom: IT Hiring is Performance-Driven, Training is a Key Focus

Nasscom reiterated that the Indian IT sector has always followed performance-driven hiring practices, aligning with global industry standards and local labour laws.

• Companies invest heavily in training and reskilling employees, ensuring they are equipped with the latest technological skills.
• Nasscom highlighted that over 1 million professionals have been trained in AI and GenAI across various levels, indicating a strong focus on upskilling.
• Leading IT firms have trained 73,000 employees in Advanced AI skilling, covering AI-native cloud technologies and embedded AI certifications.

“The technology sector in India has long embraced performance-driven hiring, with meritocracy and performance deeply embedded in company culture,” Nasscom said in a statement.

Industry-Wide Training & Reskilling Efforts

• Indian IT firms have significantly ramped up training programs, particularly in emerging technologies like AI, machine learning, and cloud computing.
• These initiatives aim to ensure that both freshers and experienced professionals remain competitive in a rapidly evolving tech landscape.

Indian Tech Industry Poised for Stronger Growth in FY25 & FY26

Despite concerns about hiring slowdowns and layoffs, the Indian technology sector is expected to witness strong growth in the coming years.

• Nasscom projects industry revenue to grow by 5.1% to $282.6 billion in fiscal 2025, up from 4% growth in FY24.
• By fiscal 2026, the IT sector’s revenue is expected to surpass $300 billion, reinforcing India’s position as a global technology hub.
• The industry is also set to double its headcount addition to 1.25 lakh new jobs in FY25, compared to 60,000 in FY24.

Infosys Layoffs Reflect a Broader Shift in the IT Industry

While Infosys’ decision to let go of trainees sparked controversy, it reflects a larger industry trend where IT firms are prioritizing skilled talent amid changing client demands and technological advancements.

• Hiring patterns in the IT sector are shifting, with a greater focus on skill-based recruitment rather than bulk hiring.
• Performance assessments are becoming stricter, ensuring that only candidates who meet high-quality benchmarks are retained.
• Automation and AI-driven solutions are transforming job roles, requiring professionals to continuously upskill to stay relevant.

Final Thoughts: Navigating a Competitive IT Job Market

• The IT industry remains a major employer in India, but hiring strategies are evolving, with an emphasis on performance-based recruitment.
• Trainees and freshers must focus on upskilling in high-demand areas such as AI, cloud computing, cybersecurity, and blockchain to secure long-term career prospects.
• While concerns about layoffs persist, the sector is poised for continued growth, with higher revenue projections and increased hiring in FY25.

As the Indian IT sector adapts to global economic shifts and technological disruptions, both companies and professionals will need to embrace agility, innovation, and lifelong learning to stay ahead in an increasingly competitive market.