India vs. Global Layoffs: Are Economic Turbulences Redefining Job Security?

More than 2,500 people employed in startups or technology companies lost their jobs in India in 2024, marking the country's third-highest layoff rate after Germany (8,640) and the US (40,989). In 2023, the number of lay-offs in India was 16,398. 

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In recent years, both the global and Indian employment landscapes have witnessed significant turbulence, with layoffs becoming increasingly prevalent across various sectors. While the tech industry has traditionally been viewed as resilient to economic downturns, recent data suggests a different reality.

According to data from Layoffs.fyi, a layoff-tracking website, a staggering total of 262,595 employees were laid off last year (2023) by 1,187 tech companies. Furthermore, in January 2024 alone, 91 tech companies already terminated 24,564 employees.

Let's delve into the dynamics of layoffs in both India and the global arena, examining key trends and implications.

Global Layoff Trends:

The global job market, particularly in the technology sector, has experienced a wave of layoffs affecting thousands of employees worldwide. Worldwide, there were 57,505 job reductions in 2024, with 90 percent of them occurring in the top three countries, one of which is India. From industry giants like Amazon and Google to startups, no entity appears immune to the impacts of economic uncertainties. In 2022 and 2023 alone, over 425,000 tech employees globally were affected by job cuts, reflecting a widespread trend of downsizing. Significant layoffs have been announced by companies such as Amazon Web Services, Zoom, Okta, PayPal, and Salesforce, citing various reasons such as restructuring and market challenges.

Year Total Tech Employees Affected by Layoffs
2022 Over 425,000
2023 262,682

Tech Sector Challenges:

Tech companies face numerous challenges contributing to these layoffs. Factors such as market saturation, evolving consumer preferences, and capital availability issues have strained many firms. Additionally, the lingering effects of the pandemic, including supply chain disruptions and changing work dynamics, have further exacerbated these challenges.

Impact on Startups:

Startups, often considered more vulnerable to economic fluctuations, have also felt the impact of layoffs globally. Despite receiving substantial funding in recent years, many startups struggle with sustainability issues. Companies like Byju's in India and various startups globally have resorted to layoffs amid financial constraints, highlighting the sector's fragility.

Indian Layoff Landscape:

In 2024, more than 2,500 people employed in startups or technology companies lost their jobs in India, marking the country's third-highest layoff rate after Germany (8,640) and the US (40,989). In 2023, the number of layoffs in India was 16,398.

Around 85 percent of the layoffs in the public domain were from three sectors: retail, food, and education. Retail accounted for the largest share (44 percent), followed by food (22 percent), and education (20 percent). Despite these figures, 2024 has shown improvement compared to the previous year.

In 2022, India accounted for approximately 11% of global layoffs, a figure that decreased to 4% by early 2023. While the country's share in global layoffs has decreased, its relative pace remains slower compared to the global rate. International companies view India's stable economic condition as a positive sign, leading to continued operations with fewer reductions. Despite challenges, India's share in global layoffs has reduced to 9.71% in 2023, signaling a promising trend.

Byju's, Swiggy, and Flipkart are among the Indian companies that have initiated layoffs, reflecting broader sectoral trends.

Moreover, according to the Indian Institute of Technology-Bombay (IITB), among graduating students in 2022-23, 6.1% are still looking for jobs. 

 

Year Total Layoffs in India Top Sectors Affected India's Share in Global Layoffs
2022 Approximately 11% Unknown 11%
Early 2023 16,398 Retail, Food, Education (85% of layoffs) 4%
2023 Unknown Retail (44%), Food (22%), Education (20%) 9.71%
2024 2,500 Retail, Food, Education (85% of layoffs) N/A

Factors Influencing Indian Layoffs:

Several factors contribute to the layoff scenario in India. While the country boasts a robust tech ecosystem and a skilled workforce, it grapples with economic uncertainties and regulatory hurdles. The lack of adequate funding, coupled with global market fluctuations, adds to the challenges faced by Indian companies.

The pandemic years witnessed an unprecedented surge in online services, prompting tech companies to embark on hiring sprees to meet the escalating demand. However, post-pandemic landscapes are unfolding in ways divergent from earlier expectations, necessitating swift adjustments from businesses to address present realities:

Uncertain Market Conditions: Global economic interdependence and geopolitical turmoil in various regions have created a climate of uncertainty. Tech companies, accustomed to rapid growth during the pandemic, now face the challenge of navigating unpredictable market dynamics.

Reduced Consumer Spending: As the initial frenzy of pandemic-driven purchasing subsides, there has been a decline in demand for certain products or services. Tech firms must recalibrate their strategies to align with shifting consumer behaviors and preferences.

Role Redundancies: The widespread adoption of remote and hybrid work models has led to redundancies in certain roles. With teams operating in dispersed settings, companies are reevaluating their workforce structures and streamlining operations to adapt to the new work environment.

The comparison of layoff scenarios in India and globally underscores the interconnected nature of the tech industry. Economic forces, technological advancements, and geopolitical factors converge to shape employment dynamics. As companies navigate these complexities, the focus must remain on mitigating the human impact of layoffs while fostering innovation and resilience in the workforce. In the face of uncertainty, proactive measures such as upskilling initiatives and diversification strategies are essential to weathering the storm and building a more sustainable future for all stakeholders.

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