The Layoff Strategies of Indian Companies

Let’s be honest. The word “layoff” feels like a punch to the gut. It’s that dreaded email, that unscheduled “quick chat” with HR, that sudden loss of access to your Slack account. It’s a word that has haunted the Indian professional landscape for the past few years, whispered in hushed tones over chai breaks and discussed with grim faces in family WhatsApp groups. Let’s delve into the topic : The Layoff Strategies of Indian Companies.

One minute you’re hitting your targets, planning your next big project, and maybe even eyeing that promotion. The next, you’re packing your desk in a cardboard box, your world turned upside down. It feels personal, brutal, and deeply unfair. And if you’ve been through it, or you’re living in fear of it, let me just say this: I see you. You’re not alone.

I’ve had friends, brilliant, hardworking people, who were celebrated as “top performers” one quarter and deemed “redundant” the next. I’ve seen the panic in their eyes, the frantic scramble to update their resumes, the quiet despair of navigating EMIs and family responsibilities without a steady paycheck.

This isn’t just another business article filled with cold, hard stats and corporate jargon. This is a heart-to-heart. We’re going to pull back the curtain on what’s really happening in the corridors of Indian companies. We’ll decode their layoff “strategies,” understand the legal nitty-gritty, and most importantly, arm you with a practical survival guide. Because knowledge isn’t just power; in this job market, it’s your life raft.

Part 1: The “Why” – What Unleashed the Layoff Tsunami in India? 🌊

It’s easy to feel like you were the problem. Did I not work hard enough? Was my last project not good enough? Stop right there. While individual performance can sometimes be a factor, the recent wave of mass layoffs is driven by much larger, impersonal forces. Think of it less as a personal failure and more as being a small boat caught in a massive economic storm.

The Global Chill and the Tech Correction

Remember the post-pandemic hiring frenzy? Companies, especially in the tech sector, were hiring like there was no tomorrow. Flush with venture capital cash and soaring demand for digital services, they onboarded thousands. It was a party. But every party has to end.

Then came 2022. Global economies started to wobble. Inflation shot up, interest rates climbed, and the talk of a recession got louder. The war in Ukraine and supply chain disruptions added fuel to the fire. Investors got nervous. The free-flowing tap of money suddenly tightened.

For the tech world, this was a massive reality check. The “growth at all costs” mantra was replaced with a new one: “profitability and efficiency.” Companies that had over-hired during the boom suddenly found themselves with bloated payrolls and projects that weren’t generating revenue. The result? A painful “course correction.” Big names in the Indian IT and startup ecosystem, from BYJU’s to Swiggy to Wipro, started announcing massive job cuts. It wasn’t just about cutting fat; for many, it was about survival.

The Infamous “Funding Winter” for Startups

The Indian startup scene was the darling of the investment world. But the global economic chill brought on a harsh “funding winter.” Venture capitalists (VCs) who were once throwing money at any idea with a “.com” attached suddenly became extremely cautious. They started pressing their portfolio companies to cut their “burn rate” (the speed at which they were losing money) and show a clear path to profitability.

For many startups, the biggest cost is employee salaries. So, when the VCs demanded cuts, the axe fell, inevitably, on the workforce. It’s a brutal calculus: lay off 20% of your staff or risk the entire company going under in six months. This is why we saw so many young, promising startups, which were celebrated for their cool work culture and amazing perks, suddenly hand out pink slips.

Part 2: The “How” – A Field Guide to Corporate Layoff Tactics

Companies don’t just wake up and fire people randomly (well, most don’t). There’s usually a “strategy” involved. Understanding these tactics can help you see the writing on the wall and prepare yourself.

Tactic 1: The “Restructuring” or “Role Redundancy” Play

This is the most common and “cleanest” corporate explanation. You’ll hear phrases like:

• “We’re optimizing our organizational structure.”
• “We’ve decided to sunset this particular project/department.”
• “Your role has been made redundant due to a strategic pivot.”

What it really means: The company has decided that your job function is no longer needed, either because they’re cutting costs, changing business direction, or automating the task. It’s positioned as being about the role, not the person. This is often used in mass layoffs where entire teams or divisions are let go.

• Pros (for the company): It’s legally sound and provides a clear, impersonal business reason, reducing the risk of lawsuits.
• Cons (for you): It feels incredibly disempowering. Your skills and contributions are dismissed as irrelevant to the company’s future, which can be a huge blow to your confidence.

Tactic 2: The “Performance-Based” Exit (The PIP Trap)

This one is murkier and, frankly, often more insidious. A company might want to let go of an employee but doesn’t have a “redundancy” reason. So, they put the employee on a Performance Improvement Plan (PIP).

A genuine PIP is meant to help a struggling employee improve. But in the context of layoffs, it’s often a tool to build a paper trail for termination. The goals set are often vague, unrealistic, or constantly shifting. No matter how hard you work, you’re set up to fail. After a month or two, HR can say, “Well, we tried to help, but they just couldn’t meet the expectations.”

How to spot a fake PIP:

• It comes out of the blue with no prior feedback about poor performance.
• The goals are unattainable or subjective (e.g., “Show more leadership”).
• Your manager is evasive and provides no real support or guidance.

If you find yourself on a PIP that feels like a trap, it’s time to start looking for a new job immediately. Don’t waste your energy trying to win an unwinnable game. Use the time you have left to network and apply elsewhere.

Tactic 3: The “Silent Layoff” or “Quiet Firing”

This is the corporate equivalent of ghosting. Instead of a direct conversation, the company makes your work life so miserable that you quit on your own. This can involve:

• Denying you a deserved promotion or raise.
• Constantly assigning you to grunt work or dead-end projects.
• Isolating you from team meetings and important communications.
• Giving you a bad performance review without clear justification.

The goal is to get you to resign, saving the company the cost of a severance package and avoiding the negative publicity of a layoff. It’s a cowardly and deeply unethical tactic that can wreak havoc on your mental health.

Tactic 4: The Voluntary Separation Scheme (VSS)

This is often seen in older, more established companies. They offer a generous severance package (often better than the legal minimum) to employees who volunteer to resign. It’s positioned as a “golden handshake,” a respectful way to downsize.

• Who does it target? Often, it targets senior employees with higher salaries or those whose skills may be outdated.
• Is it a good deal? It can be. If you’re close to retirement, have other plans, or are confident you can find another job quickly, a VSS can be a great financial cushion. But you need to do the math carefully. Calculate if the lump sum is worth giving up a steady salary and benefits. And remember, once you take it, there’s no going back.

Part 3: The Human Cost – Stories from the Firing Line

Numbers on a spreadsheet don’t bleed. But people do. Behind every headline about “10,000 jobs cut,” there are 10,000 individual stories of shock, fear, and uncertainty.

I spoke to “Priya,” a 32-year-old marketing manager at an ed-tech firm in Bengaluru. She had just taken out a home loan with her husband. “My manager called me for a 15-minute meeting. He read from a script. He couldn’t even look me in the eye. My access was cut before I even got back to my desk. I felt like a criminal being escorted out of the building. For weeks, I just felt numb. How were we going to pay the EMI?”

Then there’s “Rohan,” a 45-year-old IT project manager from Pune with two school-going kids. “I’d been with the company for 15 years. I thought I was family. They let me go with a standard two-month severance. At my age, finding a new job at the same salary is incredibly difficult. Ageism is real. I feel like my experience counts for nothing.”

These stories are not exceptions. They are the reality for lakhs of Indians. The emotional toll is immense:

• Loss of Identity: Our jobs are often tied to our sense of self-worth. Losing a job can feel like losing a part of who you are.
• Shame and Embarrassment: Many feel a deep sense of shame, making it hard to even tell their families and friends.
• Anxiety and Depression: The financial stress combined with the uncertainty of the future can lead to serious mental health challenges.

Companies need to understand that how they let people go matters just as much as why. A layoff handled with empathy, respect, and generous support can make a world of difference to a person’s ability to bounce back.

Part 4: Know Your Rights! – Navigating Indian Labour Laws

This is the part where you need to pay close attention. India has labour laws designed to protect employees, but they can be complex. Knowing your basic rights is your first line of defense.

The key piece of legislation is the Industrial Disputes Act, 1947. Now, a disclaimer: this law primarily applies to employees classified as “workmen” (typically non-managerial, non-supervisory roles). Senior managers and executives often have less protection under this act and are governed more by the terms of their employment contract.

The Holy Trinity: Notice Period, Severance Pay, and Full & Final Settlement

Regardless of your designation, these are the three things you must focus on during an exit.

1. Notice Period:
   • Check your appointment letter. It will specify your notice period, which is typically one to three months.
   • A company can either ask you to serve this notice period or they can pay you a salary in lieu of it. This is called payment in lieu of notice (PILON).
   • Pro Tip: If you’re asked to leave immediately, ensure the PILON is part of your severance package. Don’t let them get away with not paying it.
2. Severance Pay (Retrenchment Compensation):
   • For “workmen” who have completed at least one year of continuous service, the law mandates a severance payment.
   • The formula is typically calculated as 15 days of average pay for every completed year of service.
   • Average pay includes your basic salary and dearness allowance.
   • Many companies, especially MNCs and well-funded startups, offer a more generous severance package than the legal minimum. This can range from three months to even a year’s salary, depending on your seniority and tenure. This is often negotiable!
3. Full and Final (F&F) Settlement:
   • This is the final payment you receive from the company after all dues are cleared. It should include:
     • Your last month’s salary.
     • Payment for any un-availed earned leave (leave encashment).
     • Severance pay and PILON.
     • Any statutory bonus or gratuity (if applicable). Gratuity is payable if you have completed five years of continuous service.
     • Reimbursement of any pending expenses.

Crucial Advice: DO NOT sign the F&F settlement or any exit documents until you have carefully reviewed them. If you feel the amount is incorrect or the terms are unfair, do not hesitate to push back or consult a lawyer. Once you sign, you are accepting their terms.

The Art of Negotiating Your Exit

You might feel powerless in a layoff, but you have more leverage than you think, especially if the company wants a smooth, quiet exit.

• Don’t accept the first offer immediately. Take a day or two to review it.
• Benchmark your severance. Talk to colleagues who have been laid off. Check online forums like LinkedIn or Glassdoor to see what the company has offered others.
• Highlight your contributions. Gently remind them of your long service, key projects, and positive performance reviews.
• Negotiate non-monetary benefits. Can they extend your health insurance for a few months? Can they provide outplacement services (help with resume writing and job searching)? Can they provide a positive letter of recommendation?
• Stay calm and professional. Getting emotional or angry will not help your case. A firm, polite, and well-reasoned negotiation is far more effective.

Part 5: The Survival and Revival Guide – Your Post-Layoff Action Plan 💪

Okay, the worst has happened. You’ve been laid off. Breathe. It’s a setback, not a death sentence. It’s time to shift from shock to action. Here is your step-by-step playbook.

Day 1: Damage Control and Documentation

• Secure Your Documents: Forward any important emails, appreciation letters, and performance reviews to your personal email ID before you lose access. Download your payslips.
• Get Everything in Writing: Do not accept a verbal termination. Insist on a formal termination letter that clearly states your last working day and the reason for the layoff (e.g., restructuring).
• Review the Severance Offer: Read the exit agreement carefully. Don’t sign it immediately.
• Take a Day Off: Seriously. Don’t jump straight into applying for jobs. Allow yourself a day or two to process the shock. Talk to your partner, a close friend, or a family member. It’s okay to be angry, sad, or scared.

Week 1: Financial Triage 💰

• Create a Crisis Budget: This is non-negotiable. List all your income (severance, savings) and essential expenses (rent/EMI, utilities, groceries, school fees). Cut all non-essential spending immediately.
• Check Your Emergency Fund: Hopefully, you have one. Financial planners recommend having at least 6-12 months of living expenses saved up. This is the rainy day you’ve been saving for.
• Manage Your Loans: If you have an EMI, don’t just stop paying it. This will destroy your credit score. Call your bank, explain the situation, and inquire about options like a moratorium or EMI deferment.
• Health Insurance: Your corporate health insurance will lapse. Immediately look into buying a personal health insurance policy. A medical emergency without insurance can wipe out your savings.

Month 1: Rebuild and Relaunch

• Update Your Resume and LinkedIn: This is your shop window. Tailor your resume for each job application. Highlight your achievements with quantifiable metrics (e.g., “Increased sales by 15%,” not just “Responsible for sales”). Get a professional-looking headshot for your LinkedIn profile.
• Activate Your Network: This is your single most powerful tool. Don’t just be a job-seeker; be a relationship-builder. Inform your trusted ex-colleagues, friends, and mentors that you are on the market. Don’t just ask for a job; ask for advice, information, and introductions. A warm introduction is 10x more effective than a cold application.
• Upskill and Re-skill: Is there a skill that’s in high demand in your field? A certification you’ve been putting off? Use this time to learn. There are tons of affordable courses on platforms like Coursera, Udemy, and upGrad. This not only makes you more marketable but also helps rebuild your confidence.
• Structure Your Day: The worst thing you can do is sit at home and endlessly scroll through job portals. Create a routine. Dedicate a few hours to job searching, a few to upskilling, and make sure to include time for exercise and hobbies. This provides structure and a sense of purpose.

The Marathon: Staying Mentally Strong

A job search is a marathon, not a sprint. You will face rejection. You will have days of self-doubt. It’s crucial to protect your mental health.

• Celebrate Small Wins: Got an interview call? Finished an online course? Pat yourself on the back.
• Exercise: Physical activity is a powerful antidepressant. Go for a run, do some yoga, or hit the gym.
• Stay Social: Don’t isolate yourself. Meet friends for coffee. Talk to people. Connection is the antidote to despair.
• Seek Professional Help: There is no shame in talking to a therapist or a career coach. They can provide you with tools to manage anxiety and strategies for your job search.

A Final Word: This Too Shall Pass

Being laid off feels like an ending. But trust me, it can also be a beginning. It’s a forced pause, a moment to re-evaluate what you truly want from your career and your life. Many people I know who were laid off are now in better, more fulfilling roles that they would have never found otherwise.

The Indian corporate world is in a state of flux. Job security is becoming a relic of the past. The new currency is adaptability, continuous learning, and resilience.

You are more than your job title. Your worth is not defined by your employment status. This is a chapter in your story, not the whole book. So, take a deep breath. You’ve got this. The storm will pass, and you will find your shore. And you will be stronger, wiser, and more resilient for having navigated the waves.