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Bengaluru’s tech industry: A golden goose or a workhorse?
Bengaluru’s IT sector is lauded for propelling Karnataka’s economy for years now. But the recent proposal to increase the working hours of IT employees in the State to 14 hours a day, though put on the back burner now, has sent ripples across the 20 lakh-strong labour force in the sector, many of whom are already overworked and burned out
A file photo of Manyata Tech Park in Bengaluru.
Kiran (name changed), who worked as a coder in Bengaluru with a leading e-commerce firm, used to find the work hours gruelling and exhausting. Pushed to the brink during the pandemic, when six to seven hours of meetings were followed by coding through the evening into the night, they quit overnight. Kiran later found a job with a gig platform in Spain, which gave them the flexibility to work any four days a week. As someone who was forced to make themselves available at the beck and call of the previous employer, Kiran was positively surprised this time.
The IT, ITeS and BPO sectors have been lauded as Bengaluru’s golden goose, propelling Karnataka’s economy for years now. But the recent proposal to increase the working hours of IT employees in the State to 14 hours a day has sent ripples across the 20 lakh-strong labour force in the sector, many of whom are already overworked and burned out.
As they prepare for a massive protest on August 3 at Freedom Park against increasing the working hours, though the proposal has been put on the back burner for now, the techies say the proposal is only the tip of an iceberg of exploitative practices within the industry.
The growth story
According to a Deloitte report (‘Karnataka: Powering India’s Growth’), which pegged the State’s nominal Gross State Domestic Product (GSDP) at ₹ 22.41 trillion in FY23, Karnataka boasts of the highest per capita GSDP, significantly higher than the national per capita GDP. The most important contributor to this undoubtedly has been the IT/ITeS-BPO sector.
As of 2022, around 1,500 IT firms have set up shop in Karnataka and exported software worth ₹ 6,30,000 crore, about 40% of India’s total exports.
In return, the companies enjoy reduced stamp duty, tax breaks, subsidised land, infrastructure support, exemption from several labour laws, and more.
While the ready availability of a skilled workforce played a major role in turning the State into the industry’s favourite destination, the charm of the sector was irresistible for the professionals, too. Thanks to the IT boom in the 1990s, many middle-class families saw an expansion in their income, made foreign trips for the first time and enjoyed a certain social status that came with the label of ‘a software professional.’
The other side
Cut to 2024, and the industry seems to have lost its sheen among many. Sitting at the Karnataka State IT/ITeS Employees Union (KITU) office in Madiwala, Sooraj Nidiyanga, secretary at KITU, points to the restaurants that line the busy road outside the office.
“Many of these were started by former IT employees,” he says. “It’s hard to find someone who has retired from a technical role in IT; either they have to move to a managerial role after doing an MBA. Else they are burned out, forced to leave or terminated.”
Things seemed to be shaking up within the tech community, once infamous for its apathetic attitude towards the larger society. Not ready to be the frog in the hot water, they say.
Ever since the news of increasing the work hours broke, groups of workers have been regularly holding gate meetings and street campaigns, some of them in front of offices of industry giants like Qualcomm, Capgemini, Oracle and Accenture. A mass email campaign started by KITU fetched more than 2,000 responses overnight.
As per the new proposal, “an employee working in IT/ITeS/BPO sector may be required or allowed to work for more than 12 hours in a day and not exceeding 125 hours in three continuous months.”
The proposal comes at a time when a large number of employees are already overworked without being provided any overtime benefits. According to a recent study by the Onsurity and Knowledge Chamber of Commerce and Industry, over 50% of Indian techies work for more than nine hours daily, clocking an average of 52.5 hours weekly, resulting in mental and physical health issues.
“Even after we reach home, the company expects us to take their calls, respond to emails and login if required,” says Nidiyanga. India, particularly Bengaluru, is a global IT powerhouse, but at a time when countries such as Australia, Kenya, and several European nations have been legislatively moving in the direction of favouring the employee’s ‘right to disconnect’, we seem to be in reverse gear, he feels.
The number games
After the resistance became stiff, Labour Minister Santosh Lad told media persons that the government did not moot the proposal, but by the industry, which has been pressurising the government.
While Nasscom denied making any such suggestions, sources indicated a Taiwanese electronics company, an American MNC and a couple of prominent industrialists from the city pushing for it.
If the proposal is passed, IT companies stand to gain enormously. “It all boils down to the number of hours IT companies can bill a client,” says Soujanya Sridharan, researcher and senior manager at Aapti Institute. “These are service-oriented companies, which rely on cheap labour and extensive billing hours to make their huge profit margins. They earn in forex, and their KPIs are indexed to how many hours they bill, how many projects the employee works on and so on.”
Trade union leader V.J.K. Nair believes that companies, by extending the working hours of employees, are trying to replace the existing three-shift system with a two-shift system. “Many of them have clients in the US and the UK, countries in two different time zones. They want workers in a single shift to cater to both the US and Europe,” he notes.
According to him, companies that expand their presence from China to India are also trying to introduce a version of the infamous ‘dormitory labour regime’ practised in the neighbouring country, allowing managers to exert excess control over workers.
Absence of data
While industry leaders often cite numbers in terms of the sector’s contribution to GDP, jobs created, profits made and so on, the absence of data on the financial gains of the workforce has been conspicuous. For example, there is no data available on the amount companies have spent on overtime benefits.
“In March, via additional Labour Commissioner, we gave a petition to the Labour Minister requesting data on the money companies have spent as overtime payment. In the last meeting, we were told that although the Labour Commissioner sent letters regarding the same to all companies, nobody responded to it,” says Nidiyanga.
A mountain of problems
The mobilisation of IT employees after the proposal to increase working hours has been significant. According to Nidiyanga, techies are now organising themselves and then reaching out to the union, unlike earlier when the union used to approach the workers. For many, the move to make them work longer has been a tipping point in the backdrop of the myriad problems that have persisted in the industry.
At most companies, the entry salaries have remained stagnant at around ₹ 3.5 lakh per annum for the last two decades despite rising inflation. Employees are hired and fired at will, and mass layoffs are normalised, though the sector enjoys a rosy image outside.
“The impression that IT employees earn loads of money is wrong. At the entry-level, salaries have been not even stagnant but deteriorating if you adjust them for inflation. The risk of being terminated in the name of ‘cost optimisation’ increases as one climbs up positions and starts earning more,” Nair says.
According to the All India IT & ITeS Employees’ Union (AIITEU), around 20,000 techies lost their jobs in 2023. Meanwhile, close to a lakh people were hired in lower positions, says Nidiyanga.
With no grievance redressal mechanism in place, the only option for workers is to file cases at the labour office or courts, which could then crawl on for years. The union has been fighting cases on behalf of employees terminated for reasons including pregnancy and ailing kids.
In BPO sector
Meanwhile, in the BPO sector, more often than not, employees who work for around 12 hours are not even paid the minimum wage. Salary denial, holding back certificates, contracts that include bond clauses … the list of issues goes on.
“The most severely exploited is the much larger workforce in BPOs and KPOs. There is no regulation, and the wage level is around ₹106 per hour,” Nair points out.
The continuing exemption from the Industrial Employment Standing Orders (IESO) Act allows the companies near impunity against such excesses. In March, thousands of employees took out a rally protesting the renewal of exemption from the IESO Act despite the companies not adhering to a single condition that was mandated to provide the exemption. When the exemption was renewed in 2019 and 2024, the union approached the high court. Both cases are still pending.
Counterproductive move
While companies seem to be eyeing increased profits with longer working hours, experts feel it could backfire in the long term.
“It will impact people’s physical and emotional health, their social life and relationships. It will lead to increased levels of stress, burnout, chronic stress that later on will result in anxiety, emotional numbness, reduced ability to focus, mood swings, inability to make good decisions and so on,” says Mahua Bisht, CEO of 1to1help, an Employee Assistance Program service provider.
1to1’s data shows that in the APAC region burnout is the highest in India.
Chain effect
Noting that today IT controls entire systems from healthcare to banking to communications to aviation across the world, Nair argues that problems affecting the workforce would eventually turn into larger social problems.
Manasa (name changed), who works with a leading IT company in the city, points to the recent incident of Microsoft outage. “One outage brought the entire aviation industry to a standstill. This shows the all-pervasive nature of IT today. There are important government projects people like me work on. A large number of people stand to benefit from these projects. But, how effectively these projects would take off is also a function of how efficiently employees like us can work. Overburdening us is not the way to get the most work out of us.”
There are allegations that IT companies, buoyed by their clout at various political levels, neither respond to communications from the labour department nor come for tripartite discussions.
“Companies and industry bodies should be ready to talk. We are ready for industry-friendly regulatory conditions. Employees deserve fair wages and justice,” Nair says.
Nidiyanga feels that it’s high time the conversation moves beyond minimum wage to a fair wage. While employees create large value for the companies that fetch them huge profits, the workforce is thrown crumbs of it, he says.
“This is the sector where more number of jobs are being created. But the absence of any legislation or protection for the labour force continues to be a problem.”
Similar move in factories
A similar move to increase the working hours in factories and establishments coming under the Factories Act earlier was seen by the labour unions as the government succumbing to accommodate the demand of the electronics manufacturing industries.
The Factories (Karnataka Amendment) Act, 2023, brought in by the previous BJP government, increased the maximum daily working hours from nine hours to 12 hours, increased the permissible hours of overtime from 75 hours to 144 hours in a quarter, increased the hours of work of a worker without interval from five hours to six hours even as it allowed women to work in night shift (from 7 p.m. to 6 a.m.).
Though the All India Trade Union Congress dragged the matter to the International Labour Organisation with a complaint since it violated the ILO convention C001, the government went ahead with its notification.
“Since then, the provisions are slowly being implemented in industries. Though the weekly work hours remained at 48 hours, allowing 12 hours of overtime in a week will mean 60 hours in a five-day week by increasing nine hours to 12 hours. Essentially, 60 hours of work in a week is now legal, though the 48 work a week is still there on paper. This will bring huge benefit to the employer,” says AITUC Secretary M. Satyanand.
The AITUC, quoting WHO and ILO studies, complained to ILO last year that the long working hours have been found to lead to premature deaths, while studies have also proven that the long working hours have not shown an increase in productivity either.
In a competitive environment being created by States in India to attract foreign direct investments, the amendment was seen as an enabler for industries. Similar changes were brought to the Factories Act in Gujarat, Maharashtra and Uttar Pradesh, while an attempt in Tamil Nadu hit a roadblock after allies objected to such amendments.
As more companies are adopting the provisions of the new act that has taken away the long-fought work hours of eight hours, the trade unions have called for a nationwide protest on August 9 even as they are mulling a legal recourse to stop its implementation.
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