Pain of Big Tech companies’ hiring slowdown visible in India

There are currently less than 4,000 active job openings in India from the FAAMNG cohort of companies — Facebook (Meta), Amazon, Apple, Microsoft, Netflix and Google (Alphabet) — data from Xpheno showed. This is a 55 percent reduction since July, when they had roughly 9,000 job openings.

Prior to the July quarter, these companies typically used to have about 40,000 openings in India, according to Xpheno.

Big Tech stocks cratered last week as companies sounded caution about the way forward. There is now a focus on employee productivity and concerns over layoffs as clients cut spending. Companies have spoken about reducing headcount addition and are in a hiring slowdown.

Google, Apple and Microsoft’s job openings in India are currently in the low three-digits, Xpheno data showed.

The active job openings are about 90 percent lower than the typical active hiring volumes from this set of companies, Xpheno said. Active openings are those that are directly listed by the company over the past four weeks and are accepting applications.

“Active hiring action across FAAMNG is ranging from nearly none to low-moderate levels. Primarily led by the festive season hiring action by Amazon, the active volumes have less to gain from marquees like Meta and Netflix,” said Xpheno cofounder Kamal Karanth, adding that these companies are on the lowest throttle of hiring.

Hiring has declined significantly across a wide range of skillsets and functions.

Active onboarding and hiring has been low across leadership roles, product marketing, digital media, video production, programme and product management, vendor management, tech and customer support, consumer electronics, risk management, operations, distributed systems, mobile devices, Agile project management, Enterprise Architecture, and strategic partnerships.

Company speak

The hiring numbers are in line with commentary by company executives while announcing their results, even though Q3 is a seasonally strong hiring period.

Meta chief financial officer Dave Wehner said it is making “significant changes across the board” to operate more efficiently and that hiring will slow “dramatically.” According to CEO Mark Zuckerberg, Meta is expected to end 2023 as a company of either the same size or even slightly smaller.

A letter written by Meta shareholder Altimeter Capital said that it is a “poorly kept secret in Silicon Valley that companies ranging from Google to Meta to Twitter to Uber could achieve similar levels of revenue with far fewer people.”

The company may also be looking at job cuts by putting people on improvement plans, reported Business Insider.

Amazon CFO Brian Olsavsky said it will be looking at pausing hiring in certain businesses as sales growth moderates across many businesses and increased foreign currency headwinds in Q3 are expected to continue into Q4.

“We’re also taking actions to tighten our belt, including pausing hiring in certain businesses and winding down products and services where we believe our resources are better spent elsewhere,” he said.

Alphabet said it will only continue hiring for critical roles, and that Q4 headcount addition will be significantly lower than Q3.

“...we are constantly working to make sure everyone we’ve brought in is working on the most important things as a company. We are reviewing projects at all scales pretty granularly to make sure we have the right plans there, the right resourcing and making course corrections. It is something we’ll continue doing going into 2023 as well,” Alphabet CEO Sundar Pichai said.

Microsoft recently sacked 1,000 employees worldwide, its second such move in three months, as it had previously laid off a little less than 1 percent of the workforce, which is over 200,000 people. During the earnings call too, it said that headcount addition sequentially will be “minimal” and that the company wants to use the workforce it has added.

Impact on Indian tech

Hiring tech talent has been a minefield for recruiters due to the mismatch between demand and supply, with the market having been described as overheated. The slump in Big Tech hirings is also mirrored in Indian tech, albeit not to the same extent, with startups going through a funding winter and IT giants choosing to slow down hiring and focus on utilising the talent they hired in the past year.

Monster.com CEO Sekhar Garisa told Moneycontrol that the talent that works in service companies and product companies rarely intersect, which is why it’s unlikely that Big Tech’s hiring slump is unlikely to directly benefit Indian IT services companies.

“There are always people who aspire to move from services companies to product companies. Now, that is going to be even more difficult,” he said.

Garisa said companies would be running several projects which are future investments —products likely to come out in two or three years—and those long gestation projects have now scaled down, leading to a decline in openings.

However, he added that there are enough jobs for people working in product engineering.

“It's still tough to hire good quality engineering talent for product companies,” he said.

With Big Tech, IT services and startups slowing down hiring, CIEL HR’s CEO Aditya Narayan Mishra said it is leading to an improved conversion ratio from offer to acceptance, and employees are willing to consider non-IT companies looking for tech talent.

Sanjay Shetty, director of professional search & selection and strategic accounts at Randstad said they are yet to witness a slowdown in terms of FAANG companies hiring in India and that given the macro-economic conditions and geographical uncertainties, India is seen as a safer option.

“A lot of these organisations, the big names (FAAMNG companies), have hundreds of thousands of people. And it is clear across most of these companies, a huge percentage of the global workforce is already in India. Almost maybe, if not 50 percent, two-thirds of employees from some of the large companies are from India,” Shetty told Moneycontrol.

“Because of work from home, which has led to a fluid workforce, there are a lot of organisations which are also using Indian manpower directly,” he said.

“In the short run, the non-tech companies [may stand to gain]. In the long term, it is good for the Indian economy and the IT industry per se because the markets were getting heated up and salaries were going high, so the cost arbitrage which existed earlier was getting eroded,” said CIEL’s Mishra. “That will get arrested to an extent, so in a way, the longterm implication is good.”

Garisa of Monster added that due to a higher risk appetite during the pandemic, many had moved away from product companies to startups. Now, the workforce who may have wanted to work for Big Tech companies may gravitate towards B2B SaaS companies rather than B2C startups as they are considered to be more stable, he said.

“B2B SaaS companies will definitely stand to gain because they are considered to be safer and more stable bets. The salary levels going down from the kind of unsustainable levels of before is a positive for the whole industry,” he said.