Co-operative Capacity Centres ( CCC )

 

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A Humane Pivot: 

Managing AI Layoffs through Wage Restraint and Cooperative Capacity Centres

In recent weeks, leading companies around the world—including India’s IT

 bellwether TCS—have announced mass layoffs, primarily citing AI adoption as the

 underlying cause. While these changes may appear inevitable in the pursuit of

 cost optimization and efficiency, the resulting human misery is a cause for deep

 concern. Two bold and timely suggestions aim to mitigate this upheaval: 

(1)

 Linking annual wage increases to only 75% of the previous year’s CPI rise, and

 (2) 

Establishing Cooperative Capacity Centres (CCCs) to offer displaced employees a

 dignified and productive transition.

I. Wage Increase Cap: 75% of CPI Rise

The idea is simple yet powerful: rather than pegging salary hikes to 100% of

 inflation (CPI), companies voluntarily limit it to 75%. This helps break the wage-

price spiral that makes economies less competitive and forces companies to cut

 jobs in downturns. In India's context, where top-tier professionals command

 disproportionately high compensation, this can have far-reaching effects.

Desirability:

·         - Breaks inflationary wage-price loop

- Reduces pressure on companies to lay off employees

- Encourages sustainability and stability in the labour market

Feasibility:

·         - Requires voluntary corporate adoption, not legislation

- Should be targeted at high-salary segments (> ₹25 lakh/annum)

- Can be paired with performance bonuses or ESOPs to retain talent

( Ref : 

Ø  How to break the Vicious Circle ?  …………………… 03  July  2016  )

II. Cooperative Capacity Centres (CCCs)

This concept offers a humane alternative to outright layoffs. Under India’s new Co-

operative Policy, companies like TCS could help form CCC structures made up of

 laid-off employees who retain part-time engagement with their former employers.

 These Centres can take on outsourced work at reduced cost while maintaining

 continuity and offering professionals income stability and dignity.

Desirability:

·         - Reduces social and financial impact of mass layoffs

- Maintains project continuity for firms

- Empowers middle/senior professionals with flexible work options

Feasibility:

·         - Aligns with government’s co-op policy and CSR frameworks

- Digital gig platforms can manage distributed work easily

- Infrastructure can be provided through CSR or state support

Summary: Strategic Fit of the Two Suggestions

Together, the wage cap and CCC model present a dual approach: preventing future

 misery and offering transitional dignity in the face of AI-driven disruption. Here’s

 a quick comparison:

Parameter	Wage Cap @ 75% CPI	Co-operative Capacity Centres	Impact Scope
Human Impact	Preventive	Restorative	High
Corporate Fit	Long-term cost control	Immediate cost-offset	High
Govt Alignment	Indirect (CPI-related)	Direct (Co-op policy support)	Strong
Scalability	Moderate	High (cross-sectoral)	Nationwide potential

 

India stands at a crossroads. We can either let AI-driven layoffs unfold unchecked,

 or take proactive steps to redefine the social contract between employers,

 workers, and the government. Let this proposal serve as the starting point for

 national debate.

— Hemen Parekh

www.IndiaAGI.ai  /  www.HemenParekh.ai / www.My-Teacher.in

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Policy  Brief :

Managing AI-Induced Layoffs in India In light of recent mass layoffs driven by AI adoption, such as TCS's planned reduction of 12,000 employees, India needs a humane and economically sensible framework. 

This policy brief outlines two pragmatic, scalable strategies to reduce the social costs of automation and protect livelihoods. 

1. Cap Annual Wage Increases at 75% of CPI Rise 

- Prevents inflationary spirals by slowing wage-cost cycles. - Encourages companies to retain more employees by reducing compensation pressure. - Suggested for high-salary earners only, with optional performance incentives. 

2. Create Cooperative Capacity Centres (CCCs) 

- Voluntary co-operatives formed from laid-off senior professionals. - Firms outsource to CCCs at reduced cost (e.g. 50%), while members earn partial income. - Aligns with India's new Co-operative Policy and leverages CSR funds for setup. - Government can offer subsidies and infrastructure support. 

Key Stakeholder Actions - 

CEOs: 

Pilot CCC models with laid-off staff and evaluate for wider adoption. 

- Ministry of Cooperation: 

Recognize CCCs as a co-op category eligible for support. -

 Industry Bodies: 

Facilitate forums to refine and promote both measures. -

 CSR Boards: 

Channel funds toward CCC infrastructure and digital coordination tools. 

Conclusion 

India must embrace proactive, inclusive models to manage technological disruption. Wage restraint and cooperative outsourcing provide a path that balances business efficiency with human dignity - a blueprint for responsible AI adoption. 

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CCC  Frame Work :

 For a moment, leaving aside this STRUCTURAL CHANGE ( to make ours, a LOW COST economy ) for discussion among our Governments – Industry Bodies and Employee Forums , let me suggest the following for immediate consideration by the CEO of TCS :

Ø  Under the just released “ Co-Operative Policy “ by Shri Amitbhai Shah , TCS to form a :

Co-Operative Capacity Centre ( CCC ) , whose membership would be restricted to those 12,000 Middle and Senior Level Managers , just being laid off . Membership will be voluntary but will get terminated should a member take up any other FULL TIME employment elsewhere. She may take up any other part-time GIG WORK while continuing as a Member of the CCC

Ø  TCS to outsource work to this Centre , at 50 % of the cost which TCS would have incurred if this work was carried out internally

Ø  CCC will distribute this work among its members and pay them 25 % of their last drawn salaries in TCS ( on the basis of last-drawn hourly rate , for the number of hours put in for completion of the assigned project ).  

Ø  Using the funds available under its CSR obligation, TCS to provide to CCC ( free of cost ) , building and other establishment infrastructure ( Capital Cost )

Ø  Under the newly released Co-operative Policy , if any subsidy / funding etc., is available from the Central Government , CCC will claim the same. Towards this , I urge Shri Amit bhai Shah to release appropriate notification , in respect of CCCs being a “ Category of Cooperatives “

This is a CONCEPTUAL FRAME-WORK and I urge ASSOCHAM – FICCI – CII and NASSCOM , to consider this for a NATIONAL DEBATE and forward their recommendations to Shri Amit bhai Shah