India’s IT and startup sectors may lay off 15,000 to 20,000 workers in the next six months as demand slows following the hiring frenzy of the previous two years, which boosted compensation prices.
Details about IT startups may lay off up to 20000 workers in the next six months
Recruitment consultants anticipate fewer employment mandates in the coming months and have opted not to enter new markets for the time being.
However, although some IT and startup companies are laying off employees to cut expenses, others in the same industries are hiring.
“We foresee roughly 20,000 layoffs over the next three quarters. “Over the last year, employers faced the fear of losing talent and hired in big numbers, paying them many times more than inflation and market standards,” said Lohit Bhatia, head of workforce management at recruiting agency Quess Corp.
The expense of retaining that talent has begun to impact IT corporations and startups, according to Bhatia.
So far in FY23, the two industries have laid off almost 20,000 workers, including 1,400 in the first two weeks of January. Many IT product and service organisations, edtechs, and fintechs are struggling as a result of over-hiring during the epidemic years, when they snatched up talent at high wages with the expectation of ongoing expansion.
Today, investor pressure, a projected global recession, and the domino effect of worldwide redundancies have all contributed to employee reductions. Google lay off 12,000 employees this week, following IT behemoths Meta, Amazon, and Microsoft, which laid off 11,000, 18,000, and 11,000 staff, respectively.
“Fifteen thousand employees will get retrenched during the next six months, but this will be the last leg of the recession. However, skilled employees are being integrated into the industry. Many product or IT service organisations have attrition rates of up to 15%, which means that despite layoffs, there is potential for lateral recruiting,” said Kamal Karanth, co-founder of Xpheno, which specialises in technology and startup hiring.
Even while overall headcount has decreased, IT services firms such as Tata Consultancy Services Ltd, Infosys Ltd, Wipro Ltd, and HCL Tech confront high employee costs.
The impact is primarily on junior and middle-level personnel, although search companies in charge of senior hiring in the tech and startup sectors reported a slowing in leadership hiring as well.