Infosys has fired 2100 employees and  a confirmation from ex-Infosys employees about layoffs.  The problem is that when you provide services to only a few major customers, your fortunes are tied to how well their business does.  Compared to developing a product, providing a service is not very risky , but is very labour intensive.  Since there are only 24 hours in a day, at some stage you are forced to hire people to scale and then manage them.

If you develop a technology or even understand it better than others, the entry barriers are very high and it is difficult to replicate it easily.  Indian IT companies have a lot of cash reserves, so could afford to take risks. Unfortunately they did not.

More on the Infosys employee firing technique – in India the employees are forced to “resign” , this is how layoffs are implemented by HR departments.   Feel sorry for the ex-employees, actually rating systems in most companies are not fair,  many employees who are good at office politics often get good ratings, though they do little work.