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Published: Feb 14, 2023
Updated: Feb 14, 2023

Limited Impact Expected for Indian Tech Industry Despite Global Layoffs

100000 plus laid off in first 40 days of 2023

The global tech industry has recently experienced a wave of mass layoffs, with an estimated 100,000 people losing their jobs in just the first 40 days of 2023. While India's tech industry has not been immune to these cuts, experts believe the impact on the country will be limited. According to data from Layoffs.fyi, 334 tech companies have laid off nearly 101,617 workers globally, with 35,000 of these job cuts being made by India-based firms. However, the strong IT services sector in India and the potential for global tech giants to move cut jobs to a more cost-effective location like India have experts confident in the country's resilience. Furthermore, a pickup in recruitments in India is expected by the end of Q1 2023 due to the focus on digitization and the rollout of 5G services.

Impact on India likely to be limited

Despite the recent mass layoffs happening in the global tech industry, experts predict that the impact on India's tech industry will be limited. In just the first 40 days of 2023, over 100,000 people have lost their jobs globally, with 35,000 of these job cuts being made by India-based firms. Nevertheless, India's strong IT services sector and its cost-effectiveness as a location have experts confident in the country's ability to withstand the impact.

India has long been considered a hub for the IT services sector, with a large pool of skilled professionals and a favorable business environment. This, combined with the recent pickup in recruitments, has experts optimistic about the future of the tech industry in India. The focus on digitization and the rollout of 5G services is expected to drive demand for tech services and create new job opportunities.

Artificial intelligence fuels jobs cuts

The global tech industry's shift towards automation and artificial intelligence (AI) has led to job cuts in several areas, including support and back-end operations. However, in India, the majority of job cuts have occurred in mid-level management positions. Despite this, the overall impact on the country's tech industry is expected to be limited, with many companies either maintaining their current workforce or increasing their headcount in certain areas.

India's tech industry is expected to benefit from the recent trend of multinational tech giants moving their operations to more cost-effective locations, such as India. This trend is expected to continue, driven by the need to reduce costs and maintain competitiveness in a rapidly evolving tech landscape. Furthermore, the increasing focus on digitization and the rollout of 5G services is expected to create new job opportunities in areas such as software development, cloud computing, and data analytics.

India's digitalization efforts to pay off

While the recent mass layoffs in the global tech industry have had an impact on India's tech industry, the country's strong IT services sector, cost-effectiveness, and focus on digitization are expected to limit the impact. In the coming months, experts predict that the tech industry in India will continue to grow, driven by new job opportunities and the migration of multinational tech giants to more cost-effective locations.