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Culture clash
Tuesday, February 19, 2008 — posted by Sarah
[Disclosure: I have several friends who work at IBM and Scriptorium is an IBM vendor.]Both IBM and Tata Consultancy Services have recently laid off employees in India.
I think it's fair to say that many Indians are shocked by this development. At least one person says that the interviewers should be let go because they did a bad job of evaluating people. Others are wringing their hands over ruined careers because the layoff means a black mark on your resume.
And, with much sympathy, I say to them, "Welcome to our world." Layoffs are a fact of life in the U.S. I started Scriptorium after a layoff and I think that most people in high-tech have a layoff (or two or three) in their job history.
For U.S. workers in the generation that is now retired, getting laid off was in fact shameful. I remember one colleague back in 1996 who told his father about his layoff. His father, who worked his entire career at one large corporation, said to him, "What did you do wrong?" (thanks, Dad) But today, layoffs happen. Corporations merge, or don't meet their revenue targets, or overextend themselves, and then they lay people off.
The multinationals, like IBM, have brought this mentality to India. But Indian expectations appear to be that, once hired, you get to stay.
In BusinessWeek, we find a flattering story about Tata's approach to acquisitions:
Tata's unique shareholder structure makes it easier for the group to tread lightly. Since its founding in 1868, Tata has been controlled by charitable trusts. Today, they own 66% of parent Tata Sons' shares and aren't as focused on short-term gains as most investors. The trusts, says R.K. Krishna Kumar, a director with Tata Sons, have long insulated employees "from the greed that is sweeping the corporate world." As the company gets more deeply enmeshed in the global economy, that gentility will be put to the test. Says Harvard Business School professor Tarun Khanna: "There's a different kind of rough-and-tumble to competitive pressures outside of India."And it looks as though this is already happening.
Employee costs in India to U.S. costs are rising quickly because of the exchange rate (weak dollar/strong rupee) and salary increases. As a result, the standards for Indian employees must rise as well. (If you cost more, you had better add more value.)
For U.S. employees, the Indian layoffs may be an oddly hopeful sign. Rick Smith says this at wral.com in an opinion post:
The evidence right now is anecdotal, but the IBM fresher story could mark a tipping point in offshoring/onshoring. Stay tuned.At least life in this industry is never boring.
Various reactions:
pluggd.in
digitalbhoomi.in
Yahoo News India
humsurfer.com
Labels: change management, globalization
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