Quiet Cutting in Indian Startups: Strategic Workforce Management or Morale Killer?

Quiet Cutting: A New Trend in Workforce Management?

Layoffs attract headlines and investor scrutiny, so some companies are using "quiet cutting" instead: shifting employees to less important roles, canceling key responsibilities, or moving them to ambiguous "bench" positions.

A product lead at a Bengaluru edtech firm shared anonymously that he was asked to "explore opportunities" in another department'with no clarity, resources, or timeline. He eventually quit, but the company avoided making his departure public. Is this just a strategic way to reduce headcount quietly, or an unethical workaround that damages morale and culture?

@Fortune

Certainly, YES, this is the best suitable way to avoid legal issues involved in the processes of termination or retrenchment. If you find that orders are not coming as expected, the employees will become idle and redundant. The only way to battle it is to reduce the number of employees by asking them to leave by tendering resignations. Obviously, when it is a voluntary action by the employee, there will be no interference from the Labour department citing relevant sections of the Industrial Disputes Act.

On the other hand, if you want to reduce the manpower, you have to issue a notice with a copy to the Labour department. In the case of establishments with 100 employees, you have to get permission from the government in order to retrench employees. Moreover, you have to pay notice pay and retrenchment compensation if you initiate legal termination.