A US-based healthcare company abruptly terminated 900 medical coding staff at its Kerala offices, prompting the state labour department to intervene. The department is examining the legality of the mass layoffs and seeking an immediate resolution.
Sudden Terminations Without Notice
The affected employees, working at centres in Thiruvananthapuram, Kochi, and Kozhikode, were informed of their termination via email on 2 July 2026. They were given no prior notice or severance package, violating standard labour practices. Many employees reported being locked out of their work accounts and systems without warning.
The company, which has not been officially named, operates in the medical coding and billing sector. Medical coding involves translating patient records into standardized codes for insurance claims and healthcare data management.
Government Response and Legal Scrutiny
Kerala Labour Minister V. Sivankutty confirmed that the department has initiated an inquiry. “We have received complaints from the affected workers. Our team is collecting details to verify if the termination process adhered to the Industrial Disputes Act and other labour laws,” he said.
The labour department has summoned company representatives to appear for discussions. Officials are also examining whether the firm complied with the requirement to provide one month’s notice or pay in lieu thereof, as mandated under the Shops and Commercial Establishments Act.
Impact on Workers and Local Economy
The layoffs have left 900 families in distress. Many employees had worked for the company for several years, with some earning between ₹25,000 and ₹40,000 per month. The medical coding sector in Kerala employs thousands, and this incident has raised concerns about job security in the industry.
Trade unions have condemned the move. “This is a blatant violation of workers’ rights. The company must reinstate the employees or provide proper compensation,” said K. S. Saji, a leader of the Centre of Indian Trade Unions (CITU) in Kerala.
Background of the Company
The US healthcare firm has operations in multiple countries, including India. Its Kerala offices primarily handled medical coding and revenue cycle management for US hospitals and insurance companies. The company has not issued a public statement regarding the layoffs.
Industry sources suggest that the terminations may be linked to cost-cutting measures or a shift in business strategy, but no official reason has been provided. The labour department is also probing whether the company violated the requirement to report mass layoffs to the government.
Next Steps and Possible Outcomes
The labour department has set a deadline of 10 July 2026 for the company to submit a detailed explanation. If violations are found, the company could face penalties, including fines and orders to reinstate employees.
Meanwhile, the affected workers have formed a committee to seek legal recourse. “We will approach the labour court if the government fails to secure justice for us,” said R. S. Rajesh, a terminated employee with seven years of service.
The incident highlights the vulnerability of workers in the outsourcing and IT-enabled services sector, where abrupt mass layoffs have become a recurring issue in Kerala.
