Google’s recent layoff confirmation, purportedly encompassing its entire Python team, mirrors a broader trend in the tech sector job market. However, this phenomenon is not isolated to Google or the United States. Over the past three years, an estimated 190,000 Indian tech employees have been laid off, among which nearly 70,000 were laid off in the ‘Big Four’ of India’s tech giants alone and an estimated 37,000 laid off in over 130 start-ups.
Ramesh Alluri Reddy, CEO of TeamLease Degree Apprenticeship, which is TeamLease’s (a major player in India’s human resources industry) flagship blended learning programme designed to bridge the skill gap in the workforce, shared insightful data with News18 about the layoffs, job creation, and evolving trends, offering insights into the sector’s trajectory and future prospects.
According to Reddy, the period between 2022 and 2024 proved tumultuous for the tech sector. “Fresh out of the pandemic, the sector landed in a pandemonium of wild scramble for AI adoption unleashed by Generative AI, along with workforce adjustments, automation, economic slowdowns, and restructuring efforts,” he noted.
The job market’s challenges deepened with a 21 per cent drop in job offers in December 2023 compared to 2022. While Indian tech startups saw a slight uptick in Q1 of the calendar year, with layoffs down 60 per cent from the previous year, caution prevailed. Major organisations have adjusted recruitment, cutting back on freshers’ offers and campus hiring.
Industry giants such as TCS, Infosys, and Wipro have undergone substantial restructuring, shedding tens of thousands of jobs across several quarters. The Covid pandemic accelerated automation and digital transformation, intensifying challenges for traditional IT service providers. As per Reddy, this shift has prompted a reevaluation of workforce strategies and the adoption of new technologies to stay competitive.
He highlighted the fact that while giants like Google and Microsoft pivot towards research and development, startups grapple with macroeconomic uncertainties, leading to widespread layoffs across sectors like edtech, fintech, and e-commerce.
More specifically, unlike big tech companies with deep pockets, startups face the constant challenge of securing funding. This financial imbalance generates a significant divergence in their capacity to handle economic uncertainty and the widening gap between layoffs and hiring.
The edtech segment, in particular, witnessed upheaval. Since last year, at least 25 Indian edtech startups, including all seven unicorns such as Byju’s, Unacademy, Vedantu, Physics Wallah, and others, have taken drastic measures such as laying off employees. “This tumultuous period saw a staggering 14,816 individuals lose their jobs within the edtech sector alone,” said Reddy.
The layoff effect also extended to other sectors like fintech, e-commerce, and quick delivery platforms, as companies grappled with the need for cost-cutting measures and restructuring to adapt to changing market dynamics.
“Two fintech majors have retrenched 1500 employees each till date, which is nearly 60 per cent of total fintech layoffs till date,” stated the TeamLease official adding that a prominent e-commerce giant announced workforce reductions of over 1,000 employees in response to market challenges and the need to enhance operational efficiency.
Market dynamics and trends
Despite the layoffs from tech majors and Indian startups, rays of hope emerged with a projected 10 per cent increase in hiring within Indian companies. This surge is propelled by the growth of Global Capability Centers (GCCs), which are witnessing a steady rise in the number of roles they seek.
Reddy pointed out the fact that currently, India hosts about 1,600 GCCs, employing a workforce of approximately 1.6 million. The number of GCCs is poised to grow to approximately 2,000 and is expected to employ over 2-2.2 million people by 2025.
A deeper dive into the job market dynamics reveals a persistent demand for established skill sets such as software development, SAP expertise, automotive design, and testing. Concurrently, emerging technologies like AI, Big Data, and Machine Learning also present promising career paths.
Additionally, the most notable uptick is observed in the demand for senior roles such as cybersecurity experts, data architects, cloud specialists, Java developers, and full-stack engineers, reflecting a proactive stance towards adapting to evolving technological landscapes.
According to Reddy, the most remarkable is the growth in apprenticeship engagement in the tech sector, which is helping companies control costs amidst a precarious external environment. Apprenticeships allow organisations to hire fresh talent at a lower cost, in a ‘try & buy’ model, while training them on industry-relevant skill sets. Data suggests that in the last 4 years alone, the IT sector’s apprenticeship engagement has grown by a staggering 27.6 times, the highest among the largest industries in India.
“We are seeing the green shoots of this transformation as more and more companies, including multinational corporations (MNCs), recognise the potential of apprenticeship programs to address their talent needs effectively. The number of apprentices in the IT/ITES sector increased significantly from a mere 3,208 in 2018-19 to a whopping 88,678 in 2023-24, highlighting the growing acceptance of apprentices in the sector,” he noted.
Outsourcing talent acquisition
Moreover, a rising trend in the sector is the increasing inclination of IT companies to outsource talent acquisition. As per Reddy, questions arise about the value of extensive internal training programs, given potentially diminished returns. Consequently, organisations are turning to Managed Training Services (MTS) Models, outsourcing talent attraction, development, and retention to external SMEs. This streamlines operations, cuts costs, and expands access to talent without the need for an in-house hiring infrastructure.
In terms of startups, Reddy said that the recent CII report on Unicorn 2.0 forecasts that by 2030, Unicorns could contribute $1 trillion to the GDP if they prioritise talent development through apprenticeship-based certification and courses.
He suggested that by providing structured training, startups can nurture talent while fulfilling their workforce requirements. Apprenticeships equip individuals with practical skills, enhancing their value within the startup ecosystem. Additionally, they offer startups a cost-effective means to access skilled labour by collaborating with educational institutions and vocational training centres. This mutually beneficial relationship fosters growth and vitality in the startup ecosystem.
