Revoking offer letters of freshers is not new in the Indian IT industry. Speak to any campus hire, and they will tell you that they have waited an eternity to get the joining letter from companies after being selected in the campus drives. 

The issue grabbed media attention only recently, when top IT firms such as Wipro, Infosys, and Tech Mahindra revoked offer letters doled out to freshers and students citing reasons like, “You do not meet our academic eligibility criteria, hence the offer stands null and void.” 

This has affected approximately 30,000 students and freshers. Initially, the joining and onboarding date of the hundreds of “hired” freshers was delayed. Then the students were blamed for not meeting the qualification criteria for the job role, and the offers were revoked. However, there’s more to this than meets the eye.

Infosys chief financial officer Nilanjan Roy says otherwise. At the FY23 Q2 earnings call, he said that they have already done 40,000 freshers hiring, and are on the mark of 50,000. “I don’t think there’s been any delay,” he added, saying that they have opened their Mysuru campus and it is a big attraction for talent to train physically.

The real reasons can be larger amid the fears of recession and rising inflation across the US and Europe. The whole “firing spree” is making the rounds across the globe as US and European banks cut tech funds while their economy slips into recession. Though president Joe Biden trashed the ‘R-word’ and changed its definition, but when the economy isn’t growing, the falling GDP clearly indicates its imminence.

According to experts, the Indian IT industry might witness more of such scenarios in the future. Meanwhile, Naukri.com has reported a 10% de-growth in the IT sector’s hiring activities recorded in August. Indian IT companies hired in huge numbers during the pandemic, but have now gone slow and cautious. 

In August, when most of the layoff and freezing decisions were made, India’s inflation hit 7 percent, followed by an eight-month streak, thus exceeding the tolerance targets of the central bank. While government intervention might not be the answer to this, the situation is increasingly turning into a nightmare for freshers.

Several students and freshers took to Twitter to speak about how their offer letters have been revoked while holding them for months in the onboarding process.

Question of Ethics 

Rishad Premji of Wipro has been on the receiving end of hate mail ever since the firing of 300 employees over moonlighting stating maintenance of ethical standards. Twitter is filled with people questioning the “ethics” of the company in keeping freshers waiting for months to eventually pull back on offers without giving them a dime in compensation for the lost time. 

One of the emails sent by Wipro to a candidate waiting for onboarding read — “We cannot take your candidature forward as you have not been compliant to Wipro’s assessment guidelines.”

According to reports by PTI, Wipro has also held back complete variable pay of employees from manager to the C-suite levels while offering 70 percent of the total variable pay to employees between freshers and team leaders. The cited reason for the cuts was, “Pressure on margins, inefficiency in talent supply and investment in technology.”

Workers struggling with low-paying jobs and rising inflation were not a consideration when Infosys sent a mail to its employees with the title — ‘Remember – NO TWO-TIMING – NO MOONLIGHTING’. Following this, Tata Consultancy Services also quashed its work-from-home model and asked 85 percent of its employees to return to office thrice a week.

Shifting out of India, EPAM Systems, an IT services provider in America, sacked 100 Indian employees not working on any specific projects giving the option of either exiting immediately with three months of severance pay or serving for two more months’ notice with a chance of remaining in the company, if they land any project. HCL Tech also laid off about 350 employees working on a Microsoft project.

EdTech company Unacademy laid off 1,150 employees in 2022. Byju’s and Vedantu were also not far behind with around 600 employees getting fired from each company. With the rising attrition in companies, employee cost has increased, including hiring cost and salary hikes.

Global phenomena  

The global macroeconomic conditions have also made an impact on big-tech companies like Amazon, Apple, Google, Microsoft, and Meta. 

Microsoft was the first to lay off 1,800 employees in July and also slowed down its hiring process for Windows, Teams, and Office groups in a step to cut costs. In August, the company announced that they are going to layoff 200 more of its employees.

Quickly followed Amazon, announcing a freeze on corporate hiring in tech and retail businesses till the end of 2022. They also noted that freshers who applied before October 15 can still receive offers, but with joining dates of 2023. However, the recent revocation of offers does not sound good for the applicants.

Meta CEO Mark Zuckerberg, in a Q&A session in September, divulged his plans of freezing all hiring and reducing the size of the company in 2023. The 6,000 employees of Meta in Ireland fear being laid off when their contracts come to expiration. Around 30 jobs have already been lost after the company shut down Novi, its cryptocurrency project.

Following these companies, Google and Apple too announced a halt in hiring in 2022 after their shares went down-hill. While these two companies have not announced a complete freeze or elimination of their employees, they have reduced the pace of hiring with Google issuing non-subtle threats to its employees — “Behave or get fired”.

With the big firms continuing to revoke offers and lay people off, small IT companies have the opportunity to scout for better talent and upgrade their teams. The laid off employees and the freshers that cleared the stages of selection have the skills as they passed all the tests for hiring, and can prove to be good additions to the teams.