The narrative surrounding tech layoffs in India isn't entirely bleak. However, a particular challenge known as the '40-40 problem' exists.
In India, life after layoffs prevails, finding solace in digital communities like WhatsApp groups and LinkedIn, as well as flourishing in the realm of startups like Koo.
At 4 am, he received the email, and upon awakening at 8 am, he read its contents. Shockingly, by 11 am, he found himself abruptly locked out of his company ID, without any opportunity for discussion or deliberation. The harsh reality of being laid off had hit him with brutal force, leaving no room for ambiguity.
Yash Agarwal's sudden departure from Twitter exemplifies the recurring phenomenon of global tech layoffs, which have impacted nearly 200,000 individuals in India in 2023 alone. Prominent companies like Meta, Google, Amazon, Twitter, Facebook, IBM, and over 700 others have implemented workforce reductions since the start of the year. While the numbers surpass those of the previous year, the situation is comparatively less severe than the massive job losses witnessed during the 2008 financial crisis, which affected around 30 million positions worldwide. Fortunately, in India, the aftermath of layoffs is not as grim, as there are opportunities for a fresh start.
Agarwal, who held a senior position at Twitter, found himself affected by the extensive downsizing carried out by the global tech giant. With approximately 85% of its workforce being laid off in recent months, the impact was profound. Interestingly, Agarwal chose the very platform he was let go from to share the news of his layoff. He took to Twitter, a platform he had been using for 12 years—nearly half his life—to announce, "Just got laid off. Bird App, it was an absolute honor, the greatest privilege ever to be a part of this team, this culture." Despite the circumstances, he expressed gratitude and appreciation for his time at Twitter.
Agarwal expresses his surprise at the unexpected level of support he received when his tweet went viral. He recalls, "I never anticipated the overwhelming outpouring of support that came from people all around the world." Agarwal mentions that a leader from the media division of the Chinese government retweeted his post with words of praise, and several other corporate leaders in India also shared their support. The global response he received truly resonated with him during this challenging time.
Following his layoff, Agarwal found himself inundated with job offers from both global and Indian tech companies, all vying to secure his valuable expertise. While the Indian technology sector is not entirely immune to the global upheaval, there is still a remarkable boom taking place in India. Both global and Indian players, driven by a hunger for success, are actively creating opportunities and serving as a safety net for individuals in the industry.
Agarwal points out that while layoffs have been observed globally, India holds a distinctive position in this context. He states, "India, in particular, is not a major profit driver for most of these organizations from the outset." This observation highlights the fact that the impact of layoffs in India may differ compared to other regions due to the country's unique position within the organizations in question.
While there is hope for senior tech executives like Agarwal to bounce back, the most severe impact is felt by mid-level and younger professionals. These individuals, with relatively less experience, constitute a significant portion of the workforce at the bottom of the hierarchy. The sense of panic among this group is palpable, and the waiting period for new opportunities is increasingly becoming agonizingly prolonged.
They witness their colleagues abruptly disappearing from office Zoom calls, adding to their own anxiety as they constantly refresh their email inboxes, anticipating life-altering and potentially devastating news. However, amidst this challenging situation, a pushback is occurring through platforms such as WhatsApp and LinkedIn. Support groups with thousands of members have emerged since the onset of layoffs, providing a much-needed space for mutual support and mentorship. These communities aim to uplift and guide individuals through these difficult times.
Kamal Karanth, co-founder of Xpheno, a specialist staffing company, emphasizes that the situation in the IT world is not yet one of pandemonium. He points out the need to view the scale of global layoffs in the context of the Indian tech sector, which has seen its workforce double to six million over the past decade. This broader perspective helps to understand the dynamics at play and provides insight into the current state of affairs.
Amidst the storm, many individuals are coming to realize that the current situation is not a massive disruption but rather a temporary lull. People are actively engaging in upskilling, exploring different sectors, and adapting to the swiftly evolving tech industry. This proactive approach allows them to find their footing and navigate through these changing times with resilience.
Those most severely affected:
Experienced veterans in the industry possess the resilience to weather these winds of change. However, the impact of a pink slip is particularly harsh for the younger workforce, who pursued professional degrees with the expectation of securing stable jobs and financial stability. The reality they face is a stark reminder of the challenges and uncertainties that come with their career paths.
Tejas Sudhir Tapas, an engineer from Nagpur, vividly recalls his experience, stating, "One morning, I was unexpectedly summoned to a town hall meeting at 9 am, where we were informed that 40% of us would be laid off. By 2 pm, I found myself logged out of all my IDs." This incident served as a profound realization for Tejas, as he now understands the true nature of layoffs and the fact that it can affect anyone, regardless of their position or background.
Tapas relocated to Bengaluru, driven by a job opportunity in the tech industry, only to face the devastating blow of being laid off a mere five months later. This sudden turn of events sent his world spiraling into turmoil. In response, he took the initiative to create a WhatsApp support group named #LetsFightBack in late December. Since then, the group has grown exponentially, evolving into a thriving community of thousands of individuals who have also been laid off. The community has branched out into various subgroups based on geographic locations and areas of expertise. Notably, there is even a subgroup called "LetsFightBack – Mentorship" dedicated to providing guidance and support to those who find themselves adrift in their professional journeys.
The community that has formed is truly remarkable. The text messages exchanged within it encompass a wide range of topics, from inquiries about cashing in leave days following a layoff to desperate pleas for job opportunities. When one member shared their experience of receiving a call from an alleged hiring manager who demanded a payment of Rs 4,000 to secure an interview, a flurry of texts immediately cautioned them about the scam. This community serves as a valuable support system, actively looking out for one another and providing vital information to protect against potential fraudulent schemes.
The main group predominantly comprises job postings, with the noteworthy inclusion of HR managers actively participating in the conversations. This dynamic exchange has resulted in numerous group members discovering potential job leads, and in some cases, securing full-time positions. Interestingly, a few individuals who were laid off have even transitioned into HR roles, showcasing their adaptability and willingness to explore new avenues within the industry. The group serves as a valuable platform for networking, collaboration, and career advancement.
Karanth from Xpheno characterizes the current scenario as a "frictional situation," especially for the IT services sector, which primarily hires entry-level professionals. He estimates that approximately 500,000 to 600,000 entry-level individuals may face challenges in their career paths. However, there is also a silver lining as he predicts that around 150,000 freshers will successfully secure employment opportunities this year. Despite the difficulties, there is still a ray of hope for a significant number of new professionals entering the industry.
Karanth expressed that this is the primary source of distress or concern.
A market with significant appeal:
The recruitment landscape faces a challenge known as the "40-40 problem." Recruiters tend to be hesitant when considering candidates who are over 40 years old or those who expect salaries exceeding Rs 40 lakh per annum, unless they possess exceptional skills that warrant such demands. The layoffs being witnessed appear to follow a familiar and swift pattern: tech companies acknowledge over-hiring during the pandemic and are now taking corrective measures by reducing their workforce to enhance profitability.
Labour lawyer Harpreet Saluja, who represents laid-off workers, asserts that layoffs have become the prevailing culture in the IT sector during periods of "market corrections." According to Saluja, the standard approach adopted by companies is to reduce their workforce as a straitjacket formula to address these corrections. This practice has become deeply ingrained within the industry.
Although the magnitude and impact of the recent layoffs have reverberated throughout the tech sector, India continues to be an alluring market for global tech giants. The ban imposed by China on companies such as Meta and Google has further opened up avenues for India to expand its presence and engage with foreign markets. Additionally, the Western world's emphasis on artificial intelligence has resulted in job outsourcing to India, where there is a more abundant labor pool. These factors contribute to the ongoing attractiveness of the Indian market for global tech players.
According to industry body NASSCOM, India's technology industry is projected to generate revenue exceeding $245 billion in the ongoing financial year, representing an increase of $19 billion compared to the previous year. Notably, the sector maintains its status as a net hirer, having added nearly 300,000 employees in 2023, reflecting a year-on-year growth rate of 5.7 percent. As per NASSCOM's estimates, the total employee count in the industry currently stands at approximately 5.4 million individuals. Moreover, India has emerged as an exciting destination for global capacity centers (GCCs), which typically handle backend technology operations for multinational corporations. This further underscores the country's significance as a hub for technological capabilities and services.
Undoubtedly, India holds great significance for tech companies, making it an indispensable market to consider. Freshers remain optimistic about securing promising opportunities, and top-level executives have either been rehired by global firms or have found solace in Indian startups like Koo. However, it is the professionals in the middle-level positions who have legitimate reasons for concern. They face a more uncertain situation and may experience challenges in navigating the evolving job landscape.
Emphasis on skill sets rather than experience:
Non-tech industries are increasingly taking proactive measures to absorb talent from the tech sector. Candidates with 4-10 years of experience are particularly in high demand and sought after by these industries.
NASSCOM acknowledges that the current "volatile global economic scenario" presents an opportunity to embrace new technologies and accelerate digital transformation.
According to NASSCOM's strategic overview for 2023, there is a growing trend among enterprises, including traditional ones, to leverage technology for automating processes, improving user experience, optimizing supply chains, strengthening cybersecurity, and achieving sustainability objectives. These efforts reflect a shift towards becoming purpose-driven businesses that combine technological advancements with human-centric approaches.
Therefore, Indian businesses are strategically prioritizing the development of technology as an integral aspect of their overall business transformation efforts.
Prasadh MS, Head of Workforce Research and Analytics at XPheno, highlighted that despite a slight decrease in compensation packages compared to the previous year, certain high-demand tech roles continue to attract attractive salary hikes. These roles encompass full-stack engineers, backend engineers, data scientists, and data engineers. Well-funded tech startups, for instance, are known to offer salary increments ranging from 60% to 90% for full-stack engineers, with average annual compensation ranging from Rs 15-45 lakh.
According to Prasadh, there is a substantial demand for these skill sets, with over 20,000 active job openings available at present.
Agarwal, as an example, has successfully transitioned into a new phase of his career. His tweet expressing gratitude for his time at Twitter gained significant attention and generated job offers. Agarwal has strategically carved a niche for himself in the realm of Indian tech policy and is presently engaged in various projects while also pursuing entrepreneurial endeavors.
Agarwal explains, "From what I gathered, people appreciated my approach to the situation. Many employers contacted me, not only inquiring about my skills but also my work attitude. There is a cultural perception that being laid off signifies failure. However, that may not always be the case." Agarwal emphasizes that his experience has challenged the notion that a layoff is inherently a negative reflection on an individual's abilities or character.
Not everyone possesses the resilience to maintain such a positive outlook after experiencing a layoff.
According to Saluja, in the past, there used to be a certain level of courtesy and consideration shown towards individuals who were losing their jobs. However, that sense of grace seems to be lacking in the present scenario.
Saluja highlighted that in situations where employees push back, work culture and employers can often display inflexibility, leading to actions such as withholding relieving letters. Unfortunately, laid-off workers often find themselves with limited options and may resort to emotional appeals, shedding tears in front of HR representatives and pleading for understanding.
In many cases, even such recourse is not possible. This wave of global layoffs has been marked by its harshness and a lack of empathy towards those who are losing their jobs. These layoffs have occurred on a large scale, leaving little room for negotiation or discussion.
"I believe they intentionally designed it to have precisely that effect, so that we are unable to fully comprehend what is happening to us," Tapas said in a soft tone.
Larger industry patterns:
In India, recruiters are raising concerns about the impact of the global recession on international funding for startups. This is seen as a potential source of trouble in the industry.
While global companies continue to hire tech professionals from India, the situation is challenging for Indian startups themselves. According to Karanth, the tech industry in India is highly adaptable, with well-established recruitment processes.
Amidst the continuous movement in the industry, job seekers are also adapting to the changing landscape. Freshers have returned to their parents' homes to reassess their career paths. Some individuals are resorting to prayers and wearing special rings in the hopes of attracting prosperity. Those with families are postponing major expenses and finding ways to manage their EMIs, particularly in households with dual incomes.
Meanwhile, within the #LetsFightBack WhatsApp group, a different discussion is unfolding. One of the members shared a poll, asking fellow participants about their experiences after being laid off. The poll questioned whether others were facing a similar situation of not receiving any job-related calls from sources such as Naukri, LinkedIn, Indeed, or referrals. They also inquired about the duration of unemployment experienced by the group members.
The poll presented four options for the duration of unemployment: 1-15 days, 16-30 days, 1-2 months, and over 2 months. Out of the 60 respondents, 33 individuals shared that they have been without a job for over 2 months.
Just seven minutes after the poll was posted, a message of encouragement appeared, saying, "Wishing you all the best. You'll do better. Keep upskilling yourself."
And just like that, the moment shifted. A message appeared, announcing "Urgent hiring for Telesales profile," and soon after, a flurry of CVs and resumes from other users flooded the group. It was back to business as usual in this WhatsApp group.
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