Amid the layoff chaos in major tech companies like Twitter, Meta, Disney, Amazon and Alphabet’s Google, which is reportedly planning to lay off up to 10,000 employees, how is the Indian information technology (IT) sector faring?
Capgemini and Infosys from the Indian IT sector are on a hiring binge, according to industry reports.
A report by Analytics Insight highlighted that Capgemini is looking for tech professionals in India and is accepting applications for positions available across the country. Its hiring includes both freshers and lateral hires. But its CEO Aiman Ezzat reportedly stated that he anticipates a tighter liquidity situation related to elevated interest rates. He said: “We don’t need to overhire and start looking at operational efficiency and utilisation and it’s a chance to tighten operationally.” It was also highlighted in the report that freshmen who accepted job offers from Capgemini have been claiming that they haven’t started working yet.
Meanwhile, Infosys’s variable pay percentage in the July-September quarter was significantly lower than the 70% variable pay average it provided to employees in the April-June quarter. Regarding this low percentage, the company stated that the Indian IT sector is dealing with a demanding and unpredictable environment due to an impending recession in the core market, as well as margin pressure caused by problems with high staff attrition.
All this could trigger concerns as the Indian Institutes of Technology (IIT) and Indian Institutes of Management (IIM) students will be looking for the best packages in top companies in India as well as abroad, where tech layoffs are in full swing.
FRESHER OUTLOOK
News18 spoke to an IIT Delhi student, Abhijeet, on how the layoffs have hit India’s hiring season. He said that from a fresher’s perspective, the situation was tough.
“Recession is also hitting the world, thus start-ups based in the US and UK are going to create trouble for freshers. Since India is placed in a good condition at this moment, Indian startups might not be taking these actions,” he added.
However, according to Abhijeet, experienced people may not face much trouble because many companies are hiring and the firms, including start-ups, are looking for experienced people only.
REPORT CARD
According to the most recent Naukri JobSpeak index, the hiring process in the Indian IT industry slowed down by 18% in October compared to the previous year. IT giants like Tata Consultancy Services, Wipro, HCL and Infosys collectively employed close to 28,836 people in the third quarter of this year. This figure is less than half the 53,964 people they hired in the same period in 2021. Capgemini hired 6,300 people in the September quarter, a decrease from the 11,400 hired in the prior quarter.
Dhiraj Gupta, co-founder and CTO, mFilterIt, told News18 that the tech meltdown in India happened due to a few reasons.
He said: “The Reserve Bank of India (RBI) has introduced a lot of regulations on Fintech and Crypto Exchange startups, focused on protecting data sharing, privacy, KYC compliance and a formal legitimacy of products like buy now, pay later (BNPL). Also, there are several restrictions that the RBI has put on crypto exchanges, forcing them to either shut down in India or lower the scale till they find solutions. This is one of the reasons for a slowdown in technology hiring.”
According to Gupta, another major reason is a shift in technology consumption during the Covid lockdown. “A major segment involved in this is edtech, where the products were made with an assumption that the work and schooling from home will be permanent. With this assumption proving wrong in 2022, the startups will have to change their business model, forcing them to lay off a good chunk of their teams,” he said.
As per the industry expert, it has brought negative PR towards the tech industry and for the brands. He said: “Due to the massive layoffs, loyal users of the brand lose trust. Among the internal stakeholders, there is a constant fear of losing jobs and hence a high rate of talent outflow. Also, such massive layoffs attract a lot of negative PR, questioning the decisions of the top management.”
Amit Vasistha, founder and CEO of corporate wellness aggregator GALF, said the layoffs in the workforce have always been an inevitable aspect of business operations across all industries, but mainly in the IT sector because of its dynamic nature.
He believes that some of the causes include after-effects of Covid, the Russia-Ukraine war, cost-cutting measures to reduce an excessive workforce or job eliminations that result in redundancies and inflation.
Vasistha suggested: “Tech institutions should think about preparing their students for situations like these, in addition to preparing them for a job role. They must be taught to approach these issues practically and conduct independent research on potential employers.”
“Younger professionals and recent graduates should look for ways to advance their skills and, if necessary, diversify into new industries. Networking with friends, ex-bosses, and coworkers is also crucial,” he said.
However, the expert also believes that every crisis poses new opportunities, so ‘reflect, upskill and diversify’. “We need to view layoffs as economic scenarios that are unfolding and not a personal crisis. It is unsettling, but it is also an equal opportunity to shift to a new role, job, city, or employer, in many cases skill and industry as well. It could also open the door towards entrepreneurship.”
SACKING SAGA
In case of Twitter, an email was reportedly sent to employees stating they will have to go “extremely hardcore” and would be needed to spend more working hours. It was the new boss of Twitter Elon Musk who asked the staff either to accept these terms or leave the company. But it was reported that hundreds of employees chose to resign instead of agreeing to what the email had asked them to do. Later, according to another report, Musk said that Twitter will not be laying off any more employees. This happened after almost two third of the workforce got fired.
India, where Twitter reportedly let go nearly 180 of its 230 employees, felt the brunt of the layoffs. It was reported that the product and engineering team, which collaborated with the global engineering team, was hit by 70% job cuts.
The parent company of Facebook, WhatsApp, and Instagram, Meta chose to reduce its workforce by 11,000, or 13% of its current size. Following the firings, the CEO of Meta Mark Zuckerberg wrote a post in which he accepted responsibility for the same and also attributed the unexpected results to the Covid-19-induced acceleration in tech companies.
Several H1B visa holders from India who work in the US were among those impacted at Meta.
Meanwhile, reports suggested that a performance improvement plan will be implemented by Google to gradually fire 10,000 employees.
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