US firm appears to back away from freeze on layoffs, giving ‘severance pay’ to 800 Kerala workers despite government intervention

A day after a US medical coding company was believed to have kept quiet a mass layoff of nearly 800 employees at its Kochi and Kozhikode centers following Kerala government intervention, the firm appears to have made good on its promise to maintain the status quo after it emerged late on Friday that it had credited three months’ salary — allegedly severance — to the accounts of affected employees.

CorroHealth Infotech Private Limited, which provides healthcare analytics and technology-driven solutions to hospitals and health systems, informed employees at its Kochi center that they were being laid off as part of a restructuring when they reported for duty on Friday morning. However, the workers resisted the move and contacted local legislator Uma Thomas, who alerted the district labor officer and the labor minister. A conciliation meeting was subsequently called where it was reportedly decided to maintain the status quo and allow staff access to the office until Monday’s (July 6, 2026) meeting to be chaired by the Labor Minister.

Despite this, the company reportedly credited the affected employees’ accounts around 11pm on Friday, signaling its intention to shut down operations in Kerala despite the government’s demand to protect jobs. Company representatives were not available for comment.

The affected employee stated that the company appeared to have acted on the basis of the Labor Code. It continues to operate in other locations such as Noida, Hyderabad and Coimbatore, and the decision to leave Kerala may have stemmed from “the realization that labor exploitation is not possible here as elsewhere”. The Labor Code mandates that overtime be paid for each hour beyond the set eight hours. The past exploitation attempt was reported to the Department of Labor, which immediately intervened and convinced the company that it could not act arbitrarily, he said.

Labor Minister Bindhu Krishna clarified that the new labor codes have not yet been implemented in Kerala as the state is still finalizing the rules under the central legislation. The company, she said, cannot use the proposed codes to circumvent existing protections or ignore understandings reached during mediation.

Ms. Krishna expressed concern over the company’s attitude in light of the payments made to the employees. “A course of action that violates the express assurance given in the meeting with the local MLA and the district labor officer that the status quo will be maintained till Monday’s meeting at the level of the labor minister is highly undesirable,” she said. Despite the restrictions, the government would intervene to protect the interests of employees, she added.

AG Udayakumar, district secretary of CITU, said the company’s unilateral action without prior notice violates existing labor laws. “The attempt to force individually signed contracts across the entire workforce is despicable and requires state intervention,” he said.

Another affected employee noted that their laptops remained in the office but became unusable as access was revoked. “Before, our individual names appeared when we logged in. Now the screen just says ‘User Zero – Unavailable’,” he said.

The workers, while demanding that the layoffs be reversed, were open to wage restructuring if it would preserve their jobs. If the decision is irreversible, they are demanding a severance payment of 10 months’ salary to give them adequate time to find alternative employment.

Published – 4 Jul 2026 13:22 IST