Risk Profile: Startups, tech cos face 20,000 job cuts in 6 months

Which sectors are most affected?

When the pandemic was spreading, edtech companies hired many online teachers. When schools reopened, he focused on recruiting teachers offline. But paucity of funds prompted him to dismiss many of them. According to Kamal Karanth, co-founder of Xpheno, a staffing company, the effects of the looming slowdown in developed markets, governance missteps and tight funding have hit fintech, edutech, agritech, logitech and direct-to-consumer companies the most. , Firms are laying off employees from sales, DevOps, support staff and admin. Those who have a secure job can expect a cut in bonus and variable pay.

Who is at risk in the IT sector?

Higher wage costs at IT services companies have impacted the balance sheet. While customer-facing roles are relatively safer than those on the bench, engineers and support teams are at greater risk. Companies have narrowed their net worth, but India’s top IT firms such as Tata Consultancy Services Ltd, Infosys Ltd, Wipro Ltd and HCL Tech continue to struggle with high employee costs despite a decline in total headcount Has happened. While IT firms have said they will honor all campus hires, new recruits will face stringent screening tests that will weed out in higher numbers than usual.

Where will the fired employees get jobs?

While global internet giants and Indian IT companies cut staff, jobs are available in various captive centers in India. Skills in AI and machine learning are in high demand. Startups continue to hire younger employees in marketing and sales. Banking and insurance companies are facing high job attrition – they are hiring for operations, asset management and marketing roles.

Which profiles are exempt from layoffs?

People in legal and strategic roles have remained untouched so far. Middle management employees, especially those with strong digital skills, are shielded. Client-facing teams are also safer, as companies don’t want to disturb team dynamics. Among junior employees in IT services, employees on ongoing projects are better placed than those sitting on the bench—companies have started billing their clients in running projects. At EdTech and Logitech, the finance and supply chain roles are safe for now.

How long will the hiring winter last?

Another six months. Companies have stopped mandate for middle and senior level. Many CXOs, who were hunting for new businesses, have been told that ventures are on the backburner until the market improves. However, staffing firms, which largely employ contract workers, do not see much change as the manpower here can be redeployed to different sectors. Companies have told recruiters that they will have a better understanding of manpower demand by June-July.