Indian IT’s growth struggles & layoffs rekindle unionization debate

As Indian Information Technology (IT) services firms struggle with slowing revenue growth and undertakes layoffs, the lack of unionisation within the industry has come into the spotlight.

While different IT employee unions have cropped up across states over the years, these continue to remain unrecognized by IT firms. Union representatives and industry experts note that flourishing job opportunities of the sector and its general perception of prosperity kept it away from unionisation over the years but fundamental demand challenges coupled with AI-led layoffs are now hampering this immunity. However, given the ‘professionals’ tag associated with the employees and lack of a legal framework, large-scale unions may not be possible, they add.

Alagunambi Welkin, General Secretary, Union of IT and ITeS Employees (UNITE), says that as at 2025 there are around 11 IT unions across India, which collectively have around 30,000 members.

“Although industrial standing orders mandate grievance committees, due to lack of government regulations, most IT firms bypass these rules, leaving HR bodies that reflect only management’s perspective,” he said. However, given the layoffs, employees are now starting to believe in the cause for unions, he adds. “This is reflected in our social media presence and membership.”

KC Gopikumar, State Secretary of the Centre of Indian Trade Unions (CITU), says IT unions do exist but they have been unable to attract large scale numbers as employees fear being blacklisted across the sector. According to E. Muthukumar, CITU Kancheepuram Secretary, unlike manufacturing, employees in the IT industry are well-paid and feel they do not need unions. “They come for help only if they are laid off,” he notes.

Legal experts note that unionisation is among the fundamental rights of employees and IT sector is not excluded in any sense. But labour, being in Concurrent list, different state governments further frame additional rules leading to differences, they said.

“Over the past three decades, policies favouring ‘labour market flexibility’ have eroded employee bargaining power in the IT sector, making unionisation especially challenging,” Manish Kumar, Assistant Professor, Delhi School of Economics, said.

A senior IT executive, who wished to not be named, said that once every few years, unionisation creates “tensed moments” within IT companies. “Currently, there is some amount of discussion across senior managements on how to tackle this [unionisation] and companies have their eye on it,” the person added.

IT companies that businessline reached out to, did not comment.

What has prevented unionisation?

Kamal Karanth, co-founder of staffing company Xpheno, says that socio-political reasons that led to unionisation in the manufacturing workforce are not relevant to IT. “In the manufacturing sector, co-workers are likely to be from the same neighbourhood, and wages are often similar, building a sense of collectivism that drives unionisation. In the IT sector, employees are constantly on the move due to shorter tenures and work arrangements like hybrid/remote, which do not create the same bond as in a manufacturing.”

Neeti Sharma, CEO, TeamLease Digital, notes difference in aspirations of employees in both sectors. In IT, the focus is more on career progression, skill enhancement, and performance outcomes than that of a collective community, she says. However, she adds that overthe next decade, depending on how discontent grows, new flexible forms of collective representation may emerge, if not traditional unions.

What has prevented unionization?

Classification as professionals stalls unionisation

Gaurav Vasu, Founder and CEO of UnearthInsight, said that a shift toward merit-based individual identity, rather than a collective worker identity, weakens unionisation efforts. “IT professionals who are in managerial or supervisory roles are classified as ‘non-workmen’. They are primarily governed by their employment contracts and generally have fewer statutory labour protections,” he said.

The global nature of customers also adds to the issues, and there is little room for collective action which can disrupt service delivery to global clients, analysts add.

UNITE’s Welkin also notes that IT employees in Europe and US do unionise. “TCS, Cognizant, HCL and almost every major IT company have their employee unions in the UK, the US and others who are collectively bargaining for change,” he said. Data from annual reports show that TCS has 1.1 per cent of its employees in unions, Infosys (0.8 per cent), Wipro (3.4 per cent) and HCL Tech (5.2 per cent).

The road ahead

As the IT industry goes through fundamental growth challenges, employee discontent is bound to grow and one can already see employees getting vocal on social media and internal forums. However increased unionisation remains questionable.

UnearthInsight’s Vasu said that employees have concerns around facing industry-wide bans. Unionisation typically becomes relevant when workers face serious financial hardship but those with in-demand skills often succeed without needing collective bargaining, he said.

(With inputs from T E Raja Simhan and Sanjana B)

Published on September 1, 2025