It's official now. Meta CEO Mark Zuckerberg made the announcement on the impending layoffs on Wednesday afternoon. About 13% staff of Meta -- which owns Facebook, Instagram and WhatsApp -- are being told to leave the company. Their number is staggering 11,000. And it is one of the biggest layoffs in the US this year.
Zuckerberg has said sorry to all those who will be affected with this move. It comes just days after another charismatic businessman, Elon Musk, fired 3,700 employees soon after taking over Twitter. In India, over 90% of employees were given marching orders.
Companies like Microsoft and Snapchat too have fired large chunks of their workforces, Intel is planning to begin soon, and Amazon and Apple have put a break on hiring. The trend is clear. The recession clouds are looming and tech giants are shedding extra fab.
In India, IT companies have also reduced hiring at engineering campuses, with media reports suggesting up to 20 per cent fewer hires in campus and entry-level placements in the next financial year.
The IT sector’s hire and fire situation is a worrisome addition to India’s overall unemployment numbers, which are also on the rise. Headline labour market metrics deteriorated in October 2022 with the labour participation rate falling from 39.3 per cent in September to 39 per cent. Unemployment rate rose from a low of 6.4 per cent to 7.8 per cent. However, experts have pointed out that there’s a hidden silver lining.
Writing for Business Standard, the Managing Director and CEO of Centre for Monitoring Indian Economy (CMIE) Mahesh Vyas pointed out that despite witnessing a decline from 86 million in September to 84.7 million in October, salaried jobs in both months were in fact higher than they were during any other month since the pandemic-related lockdowns that hit India in March 2020.
The CMIE data for the last two months suggest that salaried jobs are finally back to their pre-pandemic levels after a long gap of 32 months. Then how does the IT piece fit into the larger job market puzzle? DD Mishra, senior director analyst at Gartner, tells us
DD Mishra, Senior Director, Analyst, Gartner says, the correlation factor is complex - it may have direct dependency, or it may have an inversely proportional relationship. Companies are shifting from being labour-intensive to technology-dependent. Tech sector will experience more job opportunities than other sectors.
In the IT sector, the caution in hiring is on account of three factors. Sumit Kumar, the Chief Business Officer at TeamLease, explains
Sumit Kumar, Chief Business Officer, TeamLease says, IT companies in India are cautious about looming recession in the US. India’s dependency on the US market is significant. That’s why there is a slowdown in IT hiring. Slowdown in hiring is also because of shrinking margins, increasing hiring cost and competitiveness in the industry.
With most of the major multinational tech majors leading the layoffs and hiring freeze phenomenon, market experts believe that the current cautious approach to hiring in the Indian market is necessary but temporary.
Sumit Kumar of TeamLease says, hiring is expected to pick up again in Q4, as per Global Employment Outlook report. Slowdown in the hiring is temporary.
Mishra also believes that the impact of the impending recession will be muted on the Indian IT market and stresses the diversity of the sector as a factor in understanding the complexity of the current job market.
DD Mishra, Senior Director, Analyst, Gartner says, IT industry is broad, where different organisations were impacted differently. No concerns of recession in IT services industry, according to Gartner. Clients indicating of piggybacking on digital transformation mode and leverage capabilities
India’s job market is indeed giving mixed signals. But a closer look into several layers that go into determining employment trends within and without the tech and IT sector tells a different story.
 "Why are we getting mixed signals from India's job market?")
