Big tech layoffs: A concern for India

The global economic crisis triggered by the uncertainties caused by the Ukraine war, which is showing no sign of cessation of hostilities, has now further tightened its grip over the technology industry. Marquee names such as Meta, Amazon, Google, Twitter, and many others are now shedding their headcount by thousands and analysts warn this could continue well into the next year. The genesis of this development can be traced back to the earlier Covid-19 pandemic.

Though the pandemic disrupted economies worldwide, and industries such as petroleum, aviation, tourism and hospitality were hit very hard, it gave rise to limitless opportunities for the tech industry, as people, especially those with white-collar jobs, locked up in their homes began working remotely, and met colleagues and clients through Zoom or Google Meet. They improvised their shopping and entertainment needs online via Amazon and Netflix, and the schooling requirements of their children were met through Byju’s and other edtech firms. With an increase in leisure time, many took to upskilling or career shifts, and firms such as upGrad and Simplilearn were much sought after.

The tech companies saw this as the new normal with an endless demand for online applications and many felt this will not diminish even in the post-Covid world. They bulked up their investments and also went on a hiring overdrive. The venture capitalists were eager to loosen their purse strings for technology startups, especially those in the edtech sector. Hence the two years of the pandemic was a boom time for the technology industry, while their brick-and-mortar peers wilted under prolonged lockdowns, travel restrictions, and supply chain disruptions.

However, the unlocking of the economy in the post-Covid era and Russia’s invasion of Ukraine changed the equation. With both Russia and Ukraine digging their heels, the resulting energy crisis and a global economic slowdown is making even the big tech sector feel the pinch. Amazon has announced it will lay off 10,000 people, while Twitter has nearly halved its workforce after Elon Musk recently took over the microblogging site. Meta, the parent of Facebook and WhatsApp, has announced plans to fire 11,000 employees, while Google’s parent Alphabet Inc is planning to make its performance rating system more stringent to let go an estimated 10,000 ‘poor performers’.

As big tech is a globally entwined business operation, India is in no way immune to these upheavals. Edtech companies, including market leader Byju’s, have already laid off thousands of employees after the venture capital funding began drying up. In the case of companies like Amazon, Twitter, and Google, the India-based workforce has been on the firing line, though in smaller numbers when compared with their US counterparts.

The going will get very tough for many Indianorigin techies working in the US. Most of them have H-1B visas, and they face the risk of deportation if they remain jobless for over 60 days. Hence, India may face an influx of such techies, if the current tempo of job losses continues in the US. The impending economic recession is expected to cast its long shadow over India.