This week, as the awe over Chinese AI startup DeepSeek dazzling the world by creating an LLM model rivalling OpenAI at a fraction of cost was just settling down, a news report of Infosys firing 700 employees for failing to clear tests touched a raw nerve across India’s corporate world.
Normally such reports are met by a shrug, sigh or even diffidence, but this time there was a lot more sympathy and even consternation, as the employees fired by the company which was once India’s IT bellwether were trainees hired from vaunted campuses in India. Also, the reports described the termination process elaborately how the employees were assembled and were asked to vacate the Infy campus almost immediately. A story of an employee pleading to allow the company to let her stay a night more at the campus certainly created a big sympathy, immediately portraying Infosys as a villain.
The other, more pragmatic reaction, was that this has been a long-standing practice in the IT industry. Infosys, like many leading tech firms, follows a structured hiring process where recruits must clear assessments within three attempts, failing which they are let go. While this policy is not new, it does highlight some deep-rooted issues in the Indian job market.
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The education system’s accountability
The Infosys firing coming soon after the emergence of DeepSeek, none of whose employees have studied outside Chinese universities, has raised questions about Indian higher education standards.
To be on the fair side, such tests by the companies may be set at deliberately tough levels to reduce employee strength for a variety of reasons including commercial and not related to an employee’s calibre.
Still, if graduates from top institutions struggle to clear tests, it raises serious concerns about the quality of education at our hallowed campuses, which are focused on churning out people with high grades rather than ensuring that they are equipped for the real world.
Many students enter the workforce believing that their college or institute is responsible for securing them a job, given the exorbitant fees they pay. But they forget that education is about skill-building, not just placements, and focus on passing the exams and securing grades rather than deep learning. Institutions are also at fault; they need to re-evaluate their role as an assembly line of graduates, and prepare students for the real-world job market. It is time for colleges to hold up a mirror to their students and themselves.
The nature of today’s workforce is changing. This generation is more sensitive and perhaps less prepared for the tough measures that businesses take. However, a more pressing issue is that IT companies have not significantly increased entry-level salaries in over two decades. Freshers still earn the same package as their predecessors, which fuels job-hopping rather than job commitment. With no real wage growth, trainees are constantly on the lookout for better opportunities, rather than focusing on excelling in their current roles.
Also Read: India’s employment paradox
Long-term workforce planning
I remember a DBS Bank chief said almost 7-8 years ago that they have begun hiring tech experts over financial analysts. He could see the tech wave, specifically AI, and prepared for it.
Companies need similar foresight today. Most businesses spend minimal resources on R&D and workforce planning, only reacting when faced with a crisis. If companies fail to anticipate industry shifts, they will always struggle to find the right talent.
While companies push for cheaper labour, wage stagnation is a systemic problem. Whether in banking, manufacturing, infrastructure, or space technology, businesses across industries are struggling to find skilled professionals.
IT companies have effectively cartelised their salary structures, keeping wages stagnant. This creates an environment where talent acquisition becomes a challenge. While companies claim they struggle to find skilled employees, they often fail to invest in meaningful workforce development. Similar problems are there in every sector.
If the companies say they are unable to find a skilled workforce.. the question is how many companies have strategies in place for skilled workers.
Businesses want a readymade employee who can start delivering results from day one, rather than investing in training and upskilling. The industry must rethink its hiring strategies if it genuinely wants to bridge the skills gap.
Just for context, DeepSeek offers salaries that are several times what an AI engineer can earn in China, all to attract top talent.
If we fail to rationalise hiring strategies now, India’s workforce will remain unprepared for the AI and quantum computing era. One area showing promise is Global Capability Centres (GCCs), which are actively creating jobs. Encouraging such initiatives can help address employment challenges.
Also Read: Not with the same company, employees switching jobs continues
A vision for the future
Every company needs a clear vision for job creation over the next five years. India Inc need not look far for inspiration. It can take a cue from Vishal Sikka, who was ousted in a founders’ coup from Infosys. Sikka had the foresight to invest in OpenAI in 2015, a decision that is paying rich dividends for Infosys now.
I remember an anecdote about Jensen Huang, CEO of NVIDIA, who saw potential in Mellanox Technologies and told them that whenever they want to sell out they should give him the first opportunity. He promised to pay them higher than their expectations. True to his words, when that company called him, Huang bought at a way higher price than they had quoted. Businesses today need to identify such opportunities and focus on value creation rather than just inflating value by acquiring cheap companies.
The future of India’s workforce hinges on a balanced approach to jobs, skills, and wages. Without a concerted effort from both educational institutions and corporations, employability will decline, and businesses will struggle to sustain growth. If we don’t rationalise our strategies now our businesses won’t grow because we will never be ready for AI, quantum and whatever new form of technology is coming.
It is time for companies to prioritise talent development, not just cost efficiency if they want to thrive in an era of rapid technological transformation.
(Editor’s note is a column written by Amol Dethe, Editor, ETCFO. Click here to read more of his articles exploring several buzzing topics)
