How to Ensure DPDP Act Compliance During IT Retrenchment with Limited Funds
IT retrenchment is never easy. Companies must cut costs, but they still need to protect employee data. DPDP Act compliance is not optional. If a company fails, it can face fines up to ₹250 crore. The good news is that you can stay compliant even with a small budget. This guide explains simple and affordable steps.
Understanding the DPDP Act Compliance
The Digital Personal Data Protection Act, 2023, makes sure personal data is collected and used safely. To follow DPDP Act compliance, companies must:
- Allow access only to people who truly need the data.
- Delete employee data when it is no longer required.
- Clearly tell employees how their data is used.
If companies ignore these rules, they may face big penalties and lose trust.
Why IT Retrenchment Makes Compliance Hard
Retrenchment creates new risks for DPDP Act compliance. Some common challenges are:
- Low budget: Companies can’t always hire experts or buy expensive tools.
- Large data: Employee files, payroll info, and personal details need careful handling.
- Less time: Layoffs sometimes happen quickly, leaving little time to manage data properly.
- Multiple rules: DPDP Act requirements may overlap with GDPR or other laws.
Low-Cost Ways to Ensure DPDP Act Compliance
1. Focus on Data Minimisation and Deletion
This is the easiest and cheapest step for DPDP Act compliance.
- Need-to-know access: Give access only to employees who need it for their job.
- Instant access removal: As soon as someone receives a retrenchment notice, remove their system access.
- Asset checklist: Collect laptops, hard drives, and delete company data from personal devices.
- Secure deletion: Once an employee leaves, delete their personal data unless the law asks you to keep it.
2. Use Low-Cost Tech and Simple Automation
You don’t need expensive software for DPDP Act compliance.
- Shared folder permissions: Use role-based access controls in existing systems.
- HR + IT workflow: Connect HR offboarding with IT access removal to automate tasks.
- Simple data inventory: Create a spreadsheet or wiki listing where personal data is stored.
As one expert says, “Privacy cannot live only in IT. Leadership and culture matter more.”
3. Upskill Employees and Improve Governance
Training is one of the cheapest ways to strengthen DPDP Act compliance.
- Internal data guardians: Train HR, IT, and Legal teams to handle data safely.
- Document everything: Keep a record of all steps to show regulators.
- Use GDPR knowledge: If your team already knows GDPR, adapt those methods for the DPDP Act.
Real-World Examples
These companies improved DPDP Act compliance without huge budgets:
- Tech Mahindra improved its offboarding process during 10,669 layoffs in 2025.
- Oracle India used simple AI workflows to manage over 100 job cuts safely.
- Big Four firms (like PwC) upgraded their storage systems to fix gaps after new DPDP rules.
All these companies used automation, audits, and training none of which required large spending.
Future of DPDP Act Compliance
India’s privacy rules will become stricter with the 2025 DPDP Rules. Companies that use AI for monitoring and build a culture of privacy will find DPDP Act compliance easier and cheaper in the long run.
Actionable Steps You Can Start Today
To stay strong in DPDP Act compliance, follow these steps:
- Remove system access the moment layoffs are announced.
- Train teams on data minimisation and consent.
- Map employee data and protect it using low-cost encryption tools.
- Set up a simple plan for reporting data breaches.
- Use GDPR-style offboarding checklists.
- If needed, hire affordable consultants for audits.
FAQs
1. What is the DPDP Act?
India’s law that protects digital personal data. Only 9% of companies fully understand it, according to PwC.
2. Why is DPDP Act compliance important during retrenchment?
Layoffs increase risks like insider threats and data leaks.
3. What is the maximum penalty for breaking the DPDP Act?
Up to ₹250 crore.
4. Is data minimisation useful?
Yes, it reduces data risks and makes DPDP Act compliance easier.
5. How is DPDP Act different from GDPR?
Under the DPDP Act, the Data Fiduciary carries full responsibility.
6. What is purpose limitation?
Use data only for the purpose it was collected for.
7. What is the most effective low-cost action?
Automated HR-to-IT access removal right after the retrenchment notice.
Conclusion
Even with limited funds, companies can achieve strong DPDP Act compliance by planning smartly, training employees, automating simple tasks, and documenting every step. Good compliance builds trust, avoids costly fines, and keeps the company safe during difficult times like IT retrenchment.
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