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Google warns of layoffs as tech firms downsize, India's private sector hiring gets boost: What is driving these trends?

Big tech woes continue as Apple lays off hundred contract employees and Google warns of “blood in the streets”. But hiring remains strong in other industries. In India, in particular, both employers and employees are upbeat about the future.

Times Now Exclusive

Updated Aug 16, 2022, 19:01 IST

The hiring cutbacks in the tech sector in the US have not yet impacted hiring in other industries which remain red-hot.

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Big Tech companies headquartered in the United States and Europe have laid off hundreds of employees this year and more may be asked to pack their bags in the time to come. Tech firms are going through a rough patch. They hired in anticipation of a surge in growth but due to various roadblocks are forced to dial back on their plans and let go of employees in the absence of work.

Earlier this month, Google CEO Sundar Pichai said he is not satisfied with the work output of many employees. He said they needed to work with “more hunger” that what was demonstrated o “sunnier days”. Employees that work with the Google Cloud sales department said they have been warned by senior executives that if sales productivity and productivity in general does not look up then “there will be blood on the streets.”

After Google’s warning, a Bloomberg report said that Apple had fired 100 contract-based recruiters who were responsible for hiring new employees. This was a part of Apple’s plan to restrict spending and hiring even though it keeps investing in some areas.

Big Tech woes

Google and Apple are not alone in hitting the brakes on spending. Meta, Microsoft, Twitter, Tesla and Netflix, among others, have also slowed down hiring and expenditure amid uncertainties in the US market.

Xpheno data showed that the total active openings in Facebook, Apple, Amazon, Netflix, Microsoft, and Google (collectively known as FAAMNG) were below 9,000 as per an August report. These six companies typically have over 40,000 active job openings. Their hiring has frozen in India as well in a reflection of the global trends.

The companies are pausing their expansion amid concerns over inflation, a slowing economy, fear of recession in the US and Europe, and the Ukraine-Russia war. The companies had grown rapidly during the pandemic due to behavioural shifts driven by work from home orders but they are now contracting.

The hiring cutbacks in the tech sector in the US have not yet impacted hiring in other industries which remain red-hot. In July, the US economy added 528,000 jobs. Some analysts do not believe that the tech sector layoffs necessarily mean that a broader hiring slowdown is approaching.

According to a Moneycontrol report, functions that have seen a decline in hiring include solutions architecture, programme management, embedded systems, product management, business process management, risk management, development operations, tech support, content production, digital media, digital marketing, advertising, integrated marketing and lead generation.

However, job openings with Metaverse in the description were still growing although at a slower pace. It seems companies remain invested in the virtual reality space and are looking for experienced and skilled talent from relevant tech domains for the metaverse.

Meanwhile, in India

While big tech suffers, job growth in India has remained strong. As per a report, in 2021-22, eight out of top 10 private companies by market capitalisation in India added a net number of over three lakh employees..

Retail, IT services and banking added jobs which also reached Tier 2, Tier 3 and Tier 4 cities. Education, telecom, ecommerce, healthcare, FMCG, and airlines also stepped up recruitment. An analysis by The Indian Express showed that top firms added only 1 lakh employees in 2020-21 while in 2021-22 they added 3 lakh employees.

The easing of Covid lockdowns saw renewed job growth. The spike can also be attributed to a much higher attrition in the last quarter compared to the last few years. Industry experts say that high attrition coupled with strong demand is creating vacancies particularly for formal jobs in metro cities.

As per an employment outlook report by TeamLease, the intent to hire is at a 27-month high. In an interview to The Economic Times in July, Ramani Dathi, CFO, Teamlease Services said, “Data show that India is nowhere close to slowness. In fact, (our) Employment Outlook for Q2, shows a 7% quarter on quarter growth and as per our report, we are almost out of the Covid related job losses.”

Inflation and consequences of geopolitical trouble are being felt in India too, however, there appears to be a renewed confidence in India’s economic growth after the two years of Covid related curbs. Both employees and employers seem upbeat about the next few quarters.

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