US firm appears to backtrack on lay-off freeze, credits ‘severance pay’ to 800 Kerala employees despite govt intervention

A day after a US-based medical coding company was believed to have kept in abeyance the mass lay-off of nearly 800 employees across its Kochi and Kozhikode centres following intervention by the Kerala government, the firm appears to have gone back on its promise to maintain status quo, after it emerged that late on Friday night, it credited three months’ salary – purportedly a severance package – to the accounts of affected employees.

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

Despite this, the company reportedly credited money to the accounts of affected employees around 11 p.m. on Friday, signalling its intent to shut down operations in Kerala despite the government’s request to safeguard jobs. Company officials were unavailable for comment.

An affected employee said the company seemed to have acted based on the Labour Codes. It continues to operate in other places like Noida, Hyderabad, and Coimbatore, and the decision to exit Kerala may have stemmed from “the realisation that labour exploitation was not possible here as elsewhere.” The Labour Codes mandate overtime payment for every hour beyond the stipulated eight. A past attempt at exploitation had been reported to the Labour Department, which promptly intervened, convincing the company it could not act arbitrarily, he said.

Labour Minister Bindhu Krishna clarified that the new Labour Codes have not yet been enforced in Kerala, as the State is still finalising rules under the central legislation. The company, she said, cannot invoke the proposed codes to bypass existing protections or disregard the understanding reached during mediation.

Ms. Krishna expressed concern over the company’s stance in light of the payments made to employees. “A move that violates the explicit assurance given at a meeting with the local MLA and the district labour officer that status quo would be maintained until the Labour Secretary-level talks on Monday is highly objectionable,” she said. Despite limitations, the government would intervene to protect employees’ interests, she added.

A.G. Udayakumar, district joint secretary of CITU, said the company’s unilateral action without prior notice violated existing labour laws. “The attempt to enforce contracts signed individually across an entire workforce is despicable and warrants State intervention,” he said.

Another affected employee noted that their laptops remained at the office but were rendered useless as access had been revoked. “Earlier, our individual names appeared when we logged in. Now the screen merely displays ‘User Zero – Not Available’,” he said.

Employees, while demanding reversal of the lay-offs, were open to salary restructuring if it preserved their jobs. If the decision is irreversible, they demand a severance package equivalent to 10 months’ salary to afford reasonable time to find alternative employment.