As Indian techies in the US are being laid off left, right and centre, creating an atmosphere of uncertainty, now a report says that techies in India too may face lay-off pressure.
In the US Google, IBM, Microsoft, Amazon and others have announced mass sacking over the span of a few days. It is now feared that Indian tech services firms may also lay off between 80,000 to 120,000 lakh people over the next two quarters.
According to a report quoted in the media, five reasons have been cited as to why companies are laying off employees: over-hiring during the COVID-19 pandemic; investors are pushing the company management to counter slowdown in growth in the firms; negative cash flows and dismal earnings; companies are anticipating a recession; and the tech sector is maturing.
According to Jeffrey Pfeffer, a professor at the Stanford Graduate School of Business, this layoff ‘craze’ is more due to “copycat behaviour” rather than any real business decision. He added that layoffs don’t work to improve a company’s performance.
Sackings in India are not new. Over the past two years, over 30,000 people have lost their jobs in India in the tech sector and in January so far, Indian startups, including Dunzo, Sharechat, Rebel Foods, Captain Fresh, BharatAgri, Ola, DeHaat, Skit.ai, Coin DCX, LEAD School, Bounce, Cashfree have laid off several hundred employees.
Google-backed Dunzo laid off 3% of its staff, or around 90 people, on January 16. The move was announced a week after the startup raised $240 million in a round of funding. Sharechat laid off over 500 employees this month. Rebel Foods fired close to 2% of its 2,500 workforce.
Google last week announced it’s in the process of laying off 12,000 employees. Amazon is reported to be selling some of its US offices after laying off 18,000 employees in the financial year 2023. Of this, 1,000 staff will be laid off in India.
IBM fired 3,900 employees. SAP is cutting almost 3,000 jobs. Salesforce is laying off about 8,000 employees, including in India. Spotify Technology said it is reducing its workforce by about 6%, which translates to about 588 jobs. Intel Corp. is slashing hundreds of jobs in Silicon Valley. Microsoft plans to cut about 10,000 positions. Coinbase announced 950 job cuts in an attempt to cut costs.
That, however, seems to be the tip of the iceberg. It seems deeper layoffs are coming in 2023 as most business economists have predicted that their companies will cut payrolls in the coming months. According to a report in CNN citing a new survey, only 12 percent of economists surveyed by the National Association for Business Economics (NABE) — anticipate employment will increase at their firms over the next three months, “down from 22 per cent this fall”. This is the first time since early days of the Covid pandemic that more business leaders anticipate jobs shrinking at their firms.