Tech Companies, Startups Layoff: Fear of Impending Layoffs Hangs Heavy on Executives, Techies Across Sectors

New Delhi, March 4: After a dismal year for tech companies and startups in 2022 which saw lakhs of employees being shown the door, 2023 started on a similar note and in January-February, 417 companies laid off more than 1.2 lakh workers globally. In January alone, close to 1 lakh tech employees lost jobs globally, dominated by companies like Amazon, Microsoft, Google, Salesforce and others.

In India, nearly 23,000 employees have been laid off by 78 startups, including unicorns like BYJU'S, Ola, OYO, Meesho, MPL, Innovaccer, Udaan, Unacademy, Vedantu, Chargebee, Cars24, LEAD and others, according to leading startup news website Inc42. Cisco Layoffs: Networking Giant Sacks Nearly 700 Employees in SF Bay Area in US as Part of ‘Limited Business Restructuring’.

Edtech companies laid off most employees, with 18 edtech startups firing more than 8,200 workers. When it comes to big companies, the layoff season in the country this year started with Amazon India sacking around 1,000 employees. Google India also fired more than 450 employees across various departments. Tech Layoffs Surpass Great Recession Levels of 2008, Set To Get Worse in Early 2023.

Elon Musk-run Twitter shut two of three of its Indian offices and also told its staff to work from home. The company had fired more than 90 per cent of its 200-plus workforce in India late last year.

At a time when the job market is hit by rising layoffs, Wipro wrote to fresh recruits who have been offered Rs 6.5 lakh per annum, asking if they would be able to work for Rs 3.5 lakh per annum. Wipro also laid off more than 400 fresher employees for poor performance in internal assessment tests in January.

After Wipro showed the exit door to hundreds of freshers, it was the turn of Infosys to sack the probationers for failing to prove their credentials in the internal assessments.

Infosys is letting go of hundreds of employees, who are at the fag end of their training and failed the internal assessment tests. The new recruits will have to undergo comprehensive training before they are added into various teams for full-fledged work, according to reports.

"I believe that the crisis will remain in the entire 2023 and even probably the first quarter of 2024. It will eventually subside and we all will come back to normalcy. However, it is going to take some time," according to Sumanth Prabhu, Co-Founder and CEO, Ulipsu.

Hiring this year is expected to slow down, with only 38 per cent of startup founders expecting a higher pace of hiring predominantly in early-stage companies, according to a report by InnoVen Capital.

However, in a silver lining for the Indian job market, hirings saw a 9 per cent sequential growth in February and the IT sector signalled a positive comeback after witnessing a decline in the past few months in line with the global meltdown. The number of new jobs in the IT sector increased by 10 per cent in February compared to the preceding month, according to data by Naukri JobSpeak.

Sectors such as banking, BPO and Retail, showed similar trends with the number of new jobs increasing by 9 per cent, 7 per cent, and 7 per cent, respectively over previous month, the report showed.

Meanwhile, India's economic growth fell, for the second consecutive quarter, to 4.4 per cent in October-December period of the current financial year, owing to weak demand and high inflation, as per data released by the Statistics and Programme Implementation Ministry.

The GDP growth was 6.3 per cent in the September-quarter of 2022-23. It shows that the danger is still lurking and global economic meltdown has only become deeper, posing a challenge to the Indian companies across the domain to reserve cash, cut expenditures and stay afloat.

(The above story first appeared on LatestLY on Mar 04, 2023 11:32 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).