Business / Recession fears hit it industry turns heartless announced widespread layoffs or hiring freezes

Zoom News : Nov 08, 2022, 02:47 PM
New Delhi : There is a debate about recession in the world including America. Apart from the recession debate, there is a long list of economists who believe that the world is in the grip of recession. This fear is getting deeper due to layoffs and hiring freeze in tech companies globally including India for some time.

Meaning of recession: Generally recession is defined by the GDP of the country. If the GDP of a country remains under pressure or shrinks for two or three consecutive quarters, then it is called 'technical recession'. Due to the shrinkage of the economy, not only does the investment climate get disturbed but the spending mood of the consumers also gets compressed. Due to this consumer demand is weak. Due to weak demand, companies control production.

Low or no production means that companies do not need many employees. Many companies may be on the verge of closure. In such a situation, companies insist on retrenchment or freezing hiring.

Layoffs in Tech Sector: Globally, companies like Amazon, Google, Facebook, Twitter, Apple have either announced layoffs or have banned new recruitments. At the same time, in India too, IT companies are not only emphasizing on layoffs but have also banned new recruitments. Apart from this, startups like Unacademy, Byju's are also trying to reduce the number of employees.

Why are tech companies ahead: In the recessionary environment, most of the IT sector is seeing a ban on layoffs or new recruitments. The biggest reason for this is the disappointing results of tech companies. Apart from this, falling stock prices of tech companies and advertising income have added to the crisis. At the same time, there have also been reports of companies freezing or cutting bonuses of employees in the US and Europe due to the falling IT budget.

It was only last week when the Bank of England expressed fears of the worst economic recession in Britain. If the apprehension turns out to be true, it will spell double trouble for Indian firms and employees as there are many big clients of Indian IT companies in the UK.

Startups also under stress: The Indian startup industry is also showing signs of stress. According to Inc42's layoff tracker, a slew of startups including unicorns such as Byju's, Cars24, Ola, LEAD, Meesho, MPL, Trell, Unacademy and Vedantu have collectively laid off 15,000 employees.

Tension for the economy: If there is any kind of injury on the IT sector of India, then there is bad news for the economy. It is the largest private sector employer in the country, providing around 12 million indirect and 50 lakh direct jobs.