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Huge IT layoffs trigger labour friction
Publication Date : 15-08-2014
Labour unrest is expected to spread following massive layoffs at several IT giants, with experts calling on multinationals to take the issue seriously.
Cisco Systems has announced a plan for global job cuts, while thousands of Microsoft employees in China are trying to negotiate a deal for better compensation following layoffs.
"Labour disputes involving overseas information technology companies are set to grow for the next two years at least as the Chinese economy slows," Zhang Zhiru, a labour rights expert at Shenzhen Chunfeng Labour Disputes Services Center, said on Thursday.
He said that although most of the IT companies are willing to provide compensation higher than that provided for under Chinese law, this does not mean they have done a perfect job.
"The law only sets a minimum level. Companies with better financial power should definitely pay more (in layoff compensation) if employees need this," Zhang said.
Cisco, the world's largest telecom equipment maker, plans to cut up to 6,000 employees globally. It did not say how many employees will lose their jobs in China, one of the world's biggest IT consumers.
Microsoft's biggest cut in the company's history could cost at least 4,000 jobs in China, according to a person familiar with the issue. Most of the cuts will come at three Nokia facilities the company acquired months ago.
More than 500 employees at a Microsoft handset development site in Beijing handed in a signed request last week calling for direct talks with company executives on layoff arrangements.
The US software giant has declined to give details of its layoff plans in China.
"We have committed to an earliest leaving date of the end of September. From the time the announcement was made, this is longer than Nokia's earlier practice in China," Donald MacRae, human resources director for Microsoft's handset unit in China, wrote in an internal e-mail explaining the layoff plan.
Microsoft is offering employees at least a further month's salary than provided for under Chinese law. The employees are asking for more and for a longer "buffering period".
Chinese law states that employees are entitled to a month's compensation for each year they have worked for a company, plus an additional month's pay.
Mike Dai, a smartphone developer at the plant, described the company's move as a "violent action". Bigger protests are being planned, he said.
Zheng Dongliang, dean of the Institute of Labour Science, said direct dialogue between companies and employees is the best way to solve labour disputes.