UP TO 1.2 LAKH TECH STAFF MAY FACE LAYOFFS IN INDIA’

Indian technology services firms are currently encountering a ‘problem of plenty’ with staff and may lay off anywhere between 80,000 and 1,20,000 people over the next two quarters, as per HR sources.
Google — whose products allow it access to industry insights and market visibility — announcing plans to lay off 12,000 people a few days ago could serve as a signal to the rest of the tech industry, the HR professionals noted, adding that ‘firing stories’ were therefore likely to continue to appear for the next six months.
Decisions by bellwethers such as Google, Meta, Amazon and Microsoft would be taken seriously by the industry worldwide, and India would not be an exception even with the element of cost arbitrage, they cautioned.

‘Hiring binge’

“Tech firms went into a hiring binge during the pandemic; now they have excess staff,” said B.S. Murthy, CEO, Leadership Capital, a CXO recruitment firm. “The industry may lay off anywhere between 80,000 and 1,20,000 in the next two quarters.”
Several HR officials are now learnt to be in the process of making a list of ‘dispensable’ employees in India while globally, 2-3% of tech workers would be laid off in the next quarter or two, according to the HR head of a large Indian IT services firm.
“There is fear of a large number of layoffs,” said the HR head, who spoke on condition of anonymity. “The HR community is currently analysing the situation in consultation with chief marketing officers and CEOs,” he added.

‘Potential benefit’

Kamal Karanth, co-founder, Xpheno, a specialist staffing company, said there was reason for worry when large tech firms with ‘loads of cash’ lay off people in thousands.
“However, cost savings come into play when you fire them in high-cost geographies such as the U.S. [or] Europe,“ he said.
Also, historically, for every employee who got retrenched overseas, headcount may have been added in India at a lower cost, he pointed out.

Impact on freshers

Last year saw the largest-ever campus hiring by tech firms, after 10 years of lull, observers said. Leading players such as TCS, Infosys, Wipro, HCL Tech, Tech Mahindra and global players, as well as tier-2 and -3 firms hired more than 2.5 lakh freshers from Indian campuses last year.
“We saw huge campus hiring in 2022 after 10 years,” Mr. Murthy said. “Markets did not show any bad signs until November. Now, we have to wait and see how many of these freshers, still in campuses, will be onboarded.”

SOURCE: THE HINDU, THE ECONOMIC TIMES, PIB

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