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High technology industry

Silent Layoffs Haunt India's Tech Industry

Strategic Insights

— 2 min read

The current trend of silent layoffs in India's tech industry is sending shockwaves through the sector, with estimates suggesting that 50,000 people or more could be affected by the end of this year. While mass layoffs by companies like Tata Consultancy Services (TCS) draw attention, scores of other tech firms have been quietly asking employees to resign or find new jobs. The situation is particularly concerning as it coincides with the slowdown of India's IT industry, which has traditionally been a significant job creator and driver of consumption.

Key Takeaways:

  • The estimated number of silent layoffs in India's tech industry could reach 50,000 or more by the end of 2024, according to experts.
  • Tata Consultancy Services (TCS) announced layoffs of 2% of its workforce (about 12,000 out of 600,000) by March 2026, sparking attention in the sector.
  • Scores of large and medium-sized technology services companies have been asking employees to resign or find new jobs quietly, according to an Economic Times (ET) report.
  • Estimates suggest that 25,000 dismissals occurred between 2023 and 2024, indicating a potential doubling of layoffs this year.
  • Rajani Sinha, Chief Economist at CareEdge Group, notes that India's IT industry has seen flat headcount growth and slower wage increases, posing a risk to the country's consumption-driven growth model.
  • Sinha adds that the IT sector's stagnation has a domino effect, impacting consumer spending, sentiment, and overall economic momentum.
  • NITI Aayog's report, "India's Services Sector: Insights from Employment Trends and State-Level Dynamics," highlights the services sector's structural imbalance, with employment rising to 29.7% in 2023-24 but still below the global average.
  • A recent report by NITI Aayog, titled "Roadmap for Job Creation in the AI Economy," outlines how AI can create up to 4 million new jobs in India by 2030, particularly in the technology and customer experience sectors.
  • The report highlights the need for strategic skilling and innovation to turn AI-driven disruption into a national opportunity, listing emerging roles such as AI Engineer, Machine Learning Engineer, Data Scientist, and Robotics Engineer.

Statistics:

  • Estimated number of silent layoffs in India's tech industry: 50,000 or more by the end of 2024.
  • Number of TCS layoffs: 2% of workforce (about 12,000 out of 600,000) by March 2026.
  • Number of dismissals between 2023 and 2024: 25,000.
  • Employee costs for IT companies in FY25: 5% growth compared to an average of 15% during FY19-FY23.
  • India's IT industry employment: millions in urban centers like Bengaluru, Hyderabad, and Pune.
  • Global average of services sector employment: 50%.
  • Number of new jobs AI can create in India by 2030: up to 4 million.

Sources:

  • Economic Times (ET) report.
  • Rajani Sinha, Chief Economist at CareEdge Group.
  • NITI Aayog's report, "India's Services Sector: Insights from Employment Trends and State-Level Dynamics."
  • NITI Aayog's report, "Roadmap for Job Creation in the AI Economy."

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