TeaThere have been several reports of layoffs in the last few months, especially in emerging sectors. Layoffs are happening not only in India, but also in major economies like the US. Large, medium and small enterprises as well as start-ups have let go of dozens or even thousands of workers. in 2022, including start-ups byju’sOla, Unacademy, Vedantu, Chargebee, WhiteHat Jr., Udaan and City Mall announced layoffs. Their reasons include restructuring, cost-cutting, automation, financial constraints, performance ratings, adverse economic conditions, and business model changes. on a global scale, Alphabet, Amazon, meta, Microsoft, Twitter And Apple, among others, has let employees go. Amazon cited an uncertain economy and rapid hiring in the past as reasons for the layoffs.
amazon story
Plus, the unionization efforts at these giant companies have captured our imagination. Amazon workers at a Staten Island warehouse called JFK8 succeeded in forming the Amazon Labor Union, led by Chris Small, who was fired from the company. Amazon responded by filing a number of objections with the National Labor Relations Board, the federal body that protects the rights of private sector employees to join together. On the other hand, warehouse workers near Albany voted overwhelmingly against unionization in October 2022 because many of them were skeptical of the bargaining power of a giant union like Amazon.
Amazon shuts down Amazon Food and Amazon Academy in India. It laid off employees at the Indian facility in a gradual manner. The nascent Information Technology Employees Senate, which works for the welfare, rights, justice and empowerment of IT (Information Technology), BPO (Business Process Outsourcing) and KPO (Knowledge Process Outsourcing) professionals in India, has alleged that Amazon Labor laws have been violated. It also complained to the Union Labor Minister and sought his ministry’s intervention. The Deputy Chief Labor Commissioner in Bengaluru served a notice seeking information from the company. But it is well known how seriously employers, especially multi-national corporations (MNCs) take labor departments; They ignore conciliation meetings more often than trade unions. NITES President Harpreet Singh Saluja vows to fight Amazon, but it won’t be easy.
hirschmann model
The question we can then ask is whether collective action can take place in emerging enterprises. Start-up facilities rarely have trade unions and hence retrenchment in these companies becomes unopposed.
Compared to traditional industries such as manufacturing, public utilities, and traditional financial sectors such as traditional banking and insurance, it is more difficult to unionize in modern and emerging sectors. Long ago, Freeman and Medoff examined the effect of trade unionism on workers’ exit behavior in the context of Albert Hirschman’s ‘exit-voice-loyalty’ model. I use it with some modifications to illustrate my point.
On the demand side, IT and IT-enabled service workers did not feel any need for trade unions as unions are generally associated with manual labor, whereas IT workers are associated with “elitism” and “professionalism”. It is believed that IT employees do not need trade unions as they have competitive compensation pay packages, good working conditions and a mechanism to redress grievances. And hence, they stay and remain loyal to the company and the industry. If these conditions are violated, they move to other organizations because they have the required skill set (exit); Therefore, the turnover of labor in this sector has been relatively high. They do not resort to collective bargaining or strike or legal action as middle class workers going to court would be stigmatized (voice). And many survive only by remaining silent (loyalty).
Despite this, large-scale layoff announcements by Tata Consultancy Services in 2015 have led to the birth of labor unions in this sector in India. Poor HR policies and practices have also provoked or motivated workers to form unions. But the rate of union formation and union activities in this industry (on the supply side) do not inspire confidence in the minds of workers.
a big question
Unions in the IT sector have to deal with both Indian and Western giants, which is a big challenge. The state clearly needs multinational companies to survive in India. Start-ups don’t have ideal conditions for unionizing. Workers would rather accept low paying jobs than unionize. Apart from this, the trade unions are fighting on many fronts. They are struggling to uphold historic labor rights, secure social security for millions of informal workers, and fight adversities during and after COVID-19. Industrial accidents are also frequent. For example, many apparel and electronics industries, which have extensive supply chains, violate labor rights. Unions have sometimes been successful in securing marginal rights. But there is only so much they can do. The Amazon story is going viral in the 500 million labor market in India, where barely 10% of the total workforce is unionized.
However, this does not lose sight of the fact that unions need to include all workers and be at the forefront of worker mobilisation. After all, they are the only historically tested collective labor institutions.
KR Shyam Sundar is Professor, XLRI, Xavier School of Management, Jamshedpur