L&T Infotech recalls 1,500 job offers

The withdrawal of offer letters is an indication that the company might have overestimated its future business after giving offer letters. 

India's sixth largest software exporter L&T Infotech, a subsidiary of engineering giant Larsen & Toubro, has withdrawn offer letters to around 1,500 students in south India. 

These students, mostly from the 2015 batches of various Tamil Nadu colleges, had been hired through campus placements and subsequent tests.

Some of these students have now started a fast near Chennai's Infotech City from Monday.

The withdrawal of offer letters is an indication that the company might have overestimated its future business after giving offer letters.

The company, though, cited the 'poor performance' of the students in a second online test conducted in March this year for withdrawing the offer letters. 

According to K Seetharaman, secretary of Knowledge Professional Forum, L&T Infotech had, in 2014, decided to hire 5,000 people from 20-25 colleges across India.

An email sent to L&T did not elicit any response. But an insider said the company had given only the 'letter of intent' to hire and not appointment letters.

Of these, 500-600 were hired from Tamil Nadu to join from FY15 onwards.

For 18 months, the students were 'benched' by the company.

After several rounds of talks, the company held another online test in March this year.

"Almost 90 per cent of the 1,500 people who appeared for the test were not qualified and it clearly shows that the intention was not to hire them," he said.

This is the first time that an Indian information technology (IT) services company has asked recruits to appear for another round of test after campus selection.

Under placement rules, a student cannot approach a rival company after accepting an offer letter at a campus recruitment.

This clause blocked many candidates from approaching other companies.

The Forum was launched in 2000 to work on issues related to IT/IT-enabled services employees and their rights.

The Forum demanded that these 1,500 students be hired by the company immediately and compensation be given for the past 18 months as they have been waiting without salary for a long time.

They also demanded that campus recruitment be monitored by government agencies or institutes such as Anna University and there should be working councils in all infotech firms.

A placement officer from one of the colleges, where L&T Infotech recruited candidates, said the company wrongly assessed the manpower recruitment and recruited heavily.

Later, to cover its mistake, they conducted another test and disqualified many people.

"We made a couple of representations but they did not reply and nobody in the company wants to take ownership. Legally, they may be on the right wicket, but morally they aren't," said an Anna University official, who did not wish to be named.

L&T's Infotech had 19,479 employees as of March 2015, up from 17,627 in March 2014, according to its draft prospectus filed with the regulators.

The company hires far lower annually than its peers.

The withdrawal of letters comes in the backdrop of an unprecedented move by Flipkart.

The online retailer informed 10 IIM-Ahmedabad students that their joining dates had been deferred to December.

The decision was announced on May 20, three days before the candidates were to join.

Flipkart cited an organisational rejig for the deferment. The L&T stock closed flat at Rs 1,486 a share on the BSE on Monday.