AFTER laying off around 18,000 few weeks ago, Amazon plans to cut around 9,000 more jobs from its cloud services, advertising and Twitch units as recession fears loom. The tech industry has been hit with a wave of layoffs since the second half of 2022, with companies such as Amazon, Lyft, Meta, Twitter, Alphabet, Microsoft, and Spotify letting go of a significant number of their employees. Earlier this month, Facebook’s parent company Meta had also announced a second round of job cuts. The company laid off 11,000 people in November last year. On March 14, Zuckerberg said Meta planned to lay off about 10,000 employees and eliminate 5,000 open roles. According to statistics gathered by Layoffs.fyi, a website that has been monitoring layoffs in the IT industry since the start of the Covid-19 outbreak, about 334 tech organisations have fired close to 101617 individuals globally since the beginning of the new year. These layoffs, which account for about 4 percent of the tech sector’s total workers, are a result of the industry’s hiring binge during the pandemic, which was fueled by a surge in demand for e-commerce and other digital services.
Now, as the pandemic wanes and the possibility of a recession looms, many tech companies are scaling back and trying to align their workforce with the declining demand. These layoffs do not necessarily spell doom for the broader economy but they do signal a struggling economy. More so, for the tech sector, which had witnessed a sudden escalation in growth during the Covid-19 pandemic.
Does India need to fear any fallout from the tech downsizing? Not necessarily. Due to a thriving IT services sector and hopes that multinational corporations may consider relocating the eliminated positions to a more cost-effective region like India, experts are sure that India will experience just a little impact. By the end of the first quarter of 2023, experts predict a rise in hiring in India, spurred by the introduction of 5G services and the nation’s emphasis on digitisation.
But India doesn’t need to worry beyond a point. Earlier in January, the International Monetary Fund warned that it expects the Indian economy to decelerate next fiscal year, with growth falling to 6.1 percent from 6.8 percent in the current fiscal year. But it also called India a bright spot while predicting that global growth will dip from an expected 3.4 percent in 2022 to 2.9 percent in 2023, then increase to 3.1 percent in 2024. One big factor contributing to rebound in India’s growth is the country’s quick recovery from the pandemic, as also highlighted by the government’s Economic Survey. But the layoffs in tech sector are a source of global unease and reflect an underperforming global economy. And for the economy to stabilize and the rampant inflation to be reigned in, the Ukraine war has to end immediately.
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