Neha Sethia is a senior executive at a global technology company based in India’s financial capital, Mumbai. A month ago, she saw disaster brewing when several of her friends who worked at another tech company were fired.
“I knew e-commerce had exploded during the coronavirus pandemic. But now the companies are facing a crisis, but I didn’t expect that it would be my turn so soon,” Sethia, who was also fired from her company, tells DW.
Pragya Kapur, a mid-level clerk in New Delhi, recounts the moment when her bosses told her they were downsizing due to the global economic crisis. “I was told I was no longer needed. It had nothing to do with my performance. I received a severance payment and was no longer part of the company with immediate effect.”
Sethia and Kapur are just two of thousands of young Indians who have been laid off by big tech companies in recent months. Up to now, these companies were considered to be very willing to spend, but now they are resorting to massive cost-cutting measures.
Technology companies in the education sector such as Byju’s and Unacademy have laid off scores of employees, along with other firms. At Byju’s, one of India’s highest-rated startups, 2,500 employees had to leave this year. According to industry insiders, at least 44 other start-ups in India are affected by massive layoffs. International brands such as Apple, Meta and Amazon are also cutting jobs or no longer filling them.
“When the global tech industry started hiring fewer people in August, it was clear that the storm would also hit India,” an anonymous job portal executive told DW. “Among other things, the rapidly rising inflation in the USA led to brand companies spending less money on advertising and employees being laid off as a result.”
Twitter reportedly laid off about 50 percent of its workforce after Elon Musk took over as head of the social media company. Shortly thereafter, the announcement followed that the Facebook group Meta Platforms was planning to lay off around 11,000 employees. Employees in India were also affected. Other companies including Microsoft, Salesforce and Oracle are also reported to have laid off employees amid the growing global economic turmoil, exacerbated by the Ukraine war and the fallout from the coronavirus pandemic.
The recent layoffs represent the largest wave of layoffs in the history of these companies. It has sparked debate about how long these dark times will last for the tech giants, which see India as a key engine of growth.
There is concern that the tech industry could collapse because many of its business models are not resilient. As a result, the valuations of many start-ups have come under pressure; many companies have announced layoffs as they restructure their businesses.
“During the pandemic, these big tech companies grew excessively and hired people massively. But obviously things didn’t go as expected,” said Shrijay Sheth, co-founder of LegalWiz.in, a company providing legal and compliance services for tech startups in India.
Sheth points out that companies are now grappling with rising interest rates, which are increasing the cost of borrowing to expand their businesses. “The global economic downturn is forcing companies around the world to adapt to rapidly changing circumstances. India is also feeling the effects. It will take an economic quarter or two for things to settle down again,” he adds.
Some of the laid-off employees continue to receive health insurance coverage to better cope with the difficult times. Others are supported through smaller measures such as career counseling or paid leave. But many people have to find other ways of coping.
Many employees in the IT industry are reluctant to join a union because they fear repercussions from management. Union members are often forced to resign and face disadvantages when looking for a new job. In these circumstances, employees often feel isolated and frightened, and eventually give in to their company’s demands. Representatives of the National Association of Software and Service Companies (NASSCOM), the interest group for the Indian IT industry, were contacted by DW for comment but declined to comment on the matter.
“Employees in India who are fired by big tech companies currently have no way to fight back because most employment contracts give the companies the right to do so,” cybersecurity law expert Pavan Duggal told DW. “So for thousands of released Indians, the situation doesn’t look very promising legally.”
Adapted from English by Phoenix Hanzo.
Author: Murali Krishnan
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The original of this article “Tech giants lay off thousands of employees” comes from Deutsche Welle.