February 4, 2023
Hello and welcome to All Indians Matter. I am Ashraf Engineer.
All of us either know of someone who’s been laid off or have at least read about the massive numbers of employees being let go by corporations across the board. The numbers are staggering and worrisome at a time when unemployment levels are high, there is a slowdown in the offing and the handling of the economy by this government is mediocre, to say the least. India’s unemployment rate was at a 16-month high of 8.3% in December 2022 as job creation failed to keep pace with the growing workforce. The unemployment rate rose from the previous month’s 8%, according to the Centre for Monitoring Indian Economy, or CMIE. That’s the highest since August 2021.
Indian technology firms will lay off 80,000 to 1.2 lakh employees over the next two quarters, say news reports. Human resource leaders said these firms went on a hiring binge during the COVID-19 pandemic and now they are overstaffed. The HR head of a leading IT services firm said they are making a list of ‘dispensable’ employees and that a large number of layoffs will follow.
According to ‘Business Today’ magazine, these are the reasons companies are asking employees to leave:
- As I said earlier, over-hiring during the pandemic
- Investors asking managements to balance the slowdown by lowering costs
- A drop in earnings
- The anticipation of a recession or a slowdown
Business newspaper ‘Mint’, meanwhile, reported that over the past two years more than 30,000 technology employees in India lost their jobs.
In January 2023 alone, startups such as Dunzo, Sharechat, Rebel Foods, Captain Fresh, BharatAgri, Ola, Coin DCX and LEAD School have laid off hundreds. Dunzo, which is backed by Google, sacked 3% of its staff. Last year, at roughly this time, Dunzo had raised $240 million from Reliance Retail.
Sharechat, meanwhile, laid off more than 500 employees while Rebel Foods fired about 2% of its 2,500-strong workforce.
Ola laid off 130 to 200 employees in January and cryptocurrency exchange CoinDCX fired 80 to 100. Ed tech company Byju’s has fired about 2,500 employees over the past two years. Others that have reduced their workforce over the last two years include Swiggy, WhiteHat JR, Unacademy, Oyo, Vedantu, CureFit, MakeMyTrip, Zomato, Uber and Udaan.
It’s not just India, of course. It’s layoff season across the world. According to Crunchbase News, 46,000 workers in US tech companies have been laid off so far this year. Google is laying off 12,000 employees while Amazon has laid off 18,000 – of which 1,000 will be in India. Meta laid off more than 11,000 in November 2022 and froze hiring in the first quarter of 2023. Twitter fired almost half of its workforce after Elon Musk took over and is likely to cut more jobs this year.
The list goes on. IBM fired 3,900, SAP is cutting 3,000 jobs, Salesforce is laying off 8,000, including in India, Spotify is reducing its workforce by 6% and Microsoft plans to cut 10,000 positions…
Facing the pincer-like effects of inflation and growing job insecurity, it’s no wonder Indian workers are on edge. According to the LinkedIn Workforce Confidence Index, 74% of Indian workers are worried about rising prices and only 43% feel they are prepared for a downturn.
The research conducted by LinkedIn from September 24 to December 30, 2022, says 78% of professionals are uneasy about their job security.
The anxiety is acute among Gen Z. According to the LinkedIn research, 66% of Gen Z professionals, in the age group of 18 to 25, are concerned about rising inflation. Only 34% of them feel they are prepared for a downturn. That is why an increasing number of Gen Z professionals have a secure job as their top priority – 46% of them have made finding a stable jobs an objective for this year.
The bad news is that the rate of hiring in India was 23% lower in December 2022 than a year earlier.
The LinkedIn research suggests that Indian professionals are upskilling and strengthening their professional networks by staying in touch with the right people and attending business events. They are also getting better aligned with business priorities, with 47% proactively asking for feedback from peers and managers. Additionally, 44% are learning new, in-demand and transferable skills.
Is there anything employers can do to reduce employee insecurity?
HR experts say that, to attract and retain talent, companies must make the right offer, of course, but also show they are invested in learning and growth. Offering internal mobility, development opportunities and promoting better work-life balance are key reasons for employees to stay on.
The experts say companies should also try to identify the personal goals of employees and create a roadmap that combines them with company goals. Other than that, transparency, inclusivity and a better work culture also make employees feel they are an integral part of the company’s long-term vision and they tend to stay on longer.
The layoff juggernaut, meanwhile, continues to roll on. As always, a better managed economy with steady growth is the key. India will do better than the rest of the world this year because of its inherent growth potential. That, however, is relative. The economy has been on shaky ground since well before the pandemic and the growth rates being logged now are off a much smaller base than before because the economy shrank as COVID shut the country down.
The youngest nation in the world needs jobs. Now.
Thank you all for listening. Please visit allindiansmatter.in for more columns and audio podcasts. You can follow me on Twitter at @AshrafEngineer and @AllIndiansCount. Search for the All Indians Matter page on Facebook. On Instagram, the handle is @AllIndiansMatter. Email me at firstname.lastname@example.org. Catch you again soon.