IBM has introduced new procedures to evaluate its staff in India with an eye to improving quality, with staff that don't make the grade being asked to leave.
"We are pioneering new ways for our people to certify their skill levels as both a validation of their value to clients and to reinforce the quality of our employees' personal skill sets," a spokesman for IBM India said.
India is a key hub for the global delivery of services by IBM, as the company takes advantage of the country's large pool of skilled labor. IBM had 73,000 staff in India at the end of last year, up from 53,000 at the end of 2006.
As a result of the new procedures, IBM has dismissed over 700 entry-level programmers from its global services delivery operation in India after they failed to measure up in performance tests, according to a report Saturday in local newspaper The Economic Times.
However, the number of staff actually laid off is likely to be less than 200, according to informed sources, who requested anonymity.
Indian operations of multinational companies and Indian outsourcing companies compete with each other for scarce staff. The news that IBM had asked staff to leave in their hundreds has taken local media and analysts by surprise.
IBM said it was screening and testing some of its employees, but would not comment on the reported lay-offs.
Even as staff salaries are increasing in India, IT services companies are insisting on a higher performance from their staff. The appreciation of the India rupee against the US dollar has also meant that staff salaries in India have got more expensive.