When the company sees that they can no longer afford the employees in their organisation, they list out employees who are on bench (bench in IT industries is when they are not tagged into any projects) and will ask them to put down the papers and if they won't do it voluntarily they will be terminated from the company with no benefits. THe employees are left with no choice in such scenario.
It is just an excuse by the HR's and the management that the employee is low-performing, whereas I have seen them getting so many recognition and accolades from the same company and yet suddenly one day they are asked to drop the papers. This is prominently seen in a service based company where they hire the resources in bulk irrespective of the requirement and when a slight recession hits them they lay-off the resources in bulk.
1. While choosing a company see the history and the frequency of lay-off they have exercised. Avoid such companies no matter how big compensation they might offer you.
2. The companies can avoid bulk hiring and take resources only as per requirement as done by the majority of the product based company.
The hiring process has definitely slowed down but down the lane, in few years it will again rise as there will be a requirement for new talents and fresh ideas. IT can't run with old ideology as development and technologies are growing rapidly.
But presently the telecom industry is doing very bad because of the unwanted competition and fight between jio and Airtel. Small companies may not survive. But we will see a good jump in the manufacturing sector and defence sector. Employment potential will increase.
But it is true that non-performers will perish. If you want to survive you have to perform. No other way.