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Following a period of very rapid growth in the latter half of the 1990s, in 2003 French computer services and engineering companies are facing their sharpest drop in business ever. It is reported that these firms tend to shy away from collective redundancy procedures and have instead been quietly shedding increasing numbers of individuals as well as pressuring their employees to resign. Trade unions, which are weak in this sector, have protested against these practices.
In France, computer services and engineering companies are the driving force in the information technology (IT) employment market. On the one hand, they have created huge numbers of new jobs over the past 20 years, generating growth in the IT industry workforce as a whole, especially in the late 1990s. On the other hand, the sector serves as a 'nursery' enabling young IT specialists to 'earn their stripes' before moving on to user companies, which are the main employers for such workers.
The software and computer services sector alone accounted for 70 % of the 250,000 paid jobs created between 1993 and 2001 in private sector IT. This very rapid growth in employment levels gave rise to a very tight labour market in the late 1990s, with the sector continually complaining of labour shortages. During this period, rapid structural growth was compounded by various one-off events and short-term developments, all coming together at the same time to put pressure on computer service and engineering companies. These included: the 'Y2K bug'; the switchover to the euro; the overhaul of information systems because of mergers and acquisitions; the increased capabilities of enterprise management software; the deregulation of the telecommunications sector; and the take-off of the internet. While customer needs grew ever greater, computer services and engineering companies faced staffing problems because of strong competition for labour from start-up companies.
However, since 2001, computer services have been experiencing major economic difficulties due to a sharp slowdown in computer-related spending. This is the second crisis to hit this fledgling industry. The first occurred in 1992-3 and marked a brief break in employment growth (the overall workforce fell slightly in 1993). The computer services and engineering and software employers’ organisation, Syntec-informatique, recently reported a 3% drop in the turnover of the computer services and software sector in 2002. The industry had seen a fall of 2% during the preceding crisis in 1993 and double-figure growth between 1997 and 2001.
Massive job losses without redundancy programmes
In France, companies with a workforce of 50 employees or more are required to develop a redundancy programme (plan social) when they intend to make redundant more than nine employees within a 30-day period. A redundancy programme is a series of measures designed to avoid redundancies or curtail their number and to facilitate the redeployment of those made redundant.
Computer services and engineering companies tend to shun the redundancy programme approach, for three main reasons. First, these companies are very conscious of their image with their customers and young graduates, who make up their preferred recruitment pool, and redundancy programmes would mean advertising their troubles. Second, they maintain that redundancy programmes are often too costly and cumbersome to implement – especially in terms of schedules. Lastly, this procedure does not allow companies to pick and choose the employees to be made redundant, whereas their real aim is to shed those employees for whom they no longer have work.
Consequently, in the case of computer services and engineering companies with too large a workforce, adjustment has tended to occur in two ways; first, at the 'qualitative' level, by assigning employees to the work available even if it does not correspond to their skills or expectations; and second, at the 'quantitative' level, by freezing new hiring and through strong 'natural wastage', though the latter tends to decrease sharply in periods of economic difficulty.
However, given the unprecedented level of the current slowdown, computer services and engineering companies have recently been taking far more radical steps. As a result, it is now reportedly common practice for firms to assign employees to jobs that are unrewarding, far from their homes and sometimes on mere 'make-work' projects, as a way of encouraging them to resign. In the early stages of the current crisis, many employees did indeed decide to leave their jobs, convinced that they would promptly find new employment. Today, they are more acutely aware of the difficulties that await them on the labour market and as a result, are less inclined to resign. Consequently, some computer services and engineering companies have, according to observers, further toughened their policies, to the extent of dismissing employees that refuse assignments on grounds of professional misconduct. This is particularly the case among small companies, which are the first to feel the effects of the economic downturn and are thought sometimes to be less compliant with labour law. However, there have been reports from trade unions and the press over late 2002 and early 2003 that this type of tactic has been surfacing in larger computer sector companies.
The phenomenon of serial individual redundancies has reached such proportions that it can no longer go unnoticed. A lawsuit against the Transiciel group, which stands accused of having dismissed 260 employees – without a redundancy programme - from one of its subsidiaries over an eight-month period, is the most telling example. The case, a ruling on which was due on 25 April 2003, ignited debate on the 'back-door' redundancy practices of computer services and engineering companies.
Trade union initiatives
Trade unions are not very well established in the computer sector, for which three reasons have been cited:
- the high degree of staff turnover and on-site work militates against the emergence of stable groups of employees;
- the heavy workloads and competition between employees invited to develop their own careers does little to encourage them to take on collective representation duties; and
- management in the sector often has a strong anti-union mindset and attempts to circumscribe union influence.
The current situation of job losses is therefore an opportunity for sector unions to mobilise employees. The only sector-level movement to have emerged in the sector so far was around sector-level negotiations on the introduction of the 35-hour working week (FR9904178N). These negotiations were accompanied by a half-day strike in some computer services and engineering companies in late 1999.
Three sectoral unions have reacted vigorously to the current wave of job losses, with an increasing number of statements in the trade and mainstream press. These are: the Federation of Research, Development and Design (Fédération des sociétés d’études) affiliated to the General Confederation of Labour (Confédération générale du travail, CGT); Betor-Pub- which defines itself as a 'new economy' union - affiliated to the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT); and the Federation of Computer Service, Research, Consulting and Engineering Company Professional and Managerial Staff (Fédération du personnel d'encadrement des sociétés de services en informatique, d'étude, du conseil et d'ingénierie, FIECI) affiliated to the General Confederation of Professional and Managerial Staff-French Confederation of Professional and Managerial Staff Confédération française de l'encadrement-Confédération générale des cadres, CFE-CGC). These unions have all denounced 'back-door' economic redundancy practices and have urged computer services and engineering companies to shoulder their responsibilities by developing genuine redundancy programmes.
Commentary
It is still too early to determine whether computer services and engineering companies’ employment adjustment practices will give unions a foothold in the sector. As is very often the case in the IT sector, alternative types of collective cooperation have developed through the internet. The Movement for a National Computer Consultant Federation (Mouvement pour une union nationale des consultants en informatique, Munci) emerged recently from an internet forum. Its goal is to form an organisation for both salaried and freelance computer professionals. This movement has had a certain amount of success, indicating that there is still a strong reluctance within this profession – devoid of any real industrial relations culture - to organise through the traditional channel of a trade union. (Yannick Fondeur, IRES)