The United States is headed toward a recession, and it is already impacting the technology sector. This year saw US tech companies laying off 136,000 people with 42,000 people losing their jobs in November alone. Given how interconnected the world is today, a global economic slowdown is inevitable, and layoffs too are not far behind.
In fact, India is already witnessing layoffs across big tech firms such as Meta, Amazon, Twitter, and start-ups such as Byju’s and Unacademy. About 66 percent of Indian CEOs expect this trend to continue in 2023 along with an economic downturn. But how severe is this likely to be? Is there hope for recovery for the Indian tech sector?
Recession and Recovery
India’s GDP grew by 8.7 percent in 2021-22. But the post-pandemic boom is fading, inflation is at an all-time high, and there is an unexpected war in Europe, resulting in the economy slowing down. Goldman Sachs recently slashed India’s GDP growth prospects to 5.9 percent. India’s population is still growing exponentially, which means that the employment crisis in the country is going to get worse. Reports indicate that by 2050, India will need to generate 280 million jobs for its sizeable youth population.
But the news is not all bleak. The GDP is likely to slow down in the first half of 2023 in line with the global recession. But it is expected to pick up pace in the second half as the world recovers, and the export market and investments improve. In fact, the World Bank raised India’s FY 2023-24 GDP growth forecast to 6.9 percent. Headline retail inflation is likely to drop to 6.1 percent next year from 6.8 percent this year. According to the Indian Staffing Federation which represents more than 100 recruitment and flexi staffing companies, the domestic IT and ITes industry is set to hire close to 1 million people by the end of 2023, though one is not sure at what seniority or level. Moneycontrol