Tech layoffs: Why program managers and CXOs are still out in the cold and jobless

From quiet layoffs to finding performance issues and putting employees on the PIP path (performance improvement plan, after which many are laid off), to benching employees, IT companies are taking all kinds of measures to trim their human resources.

Avinash, an IIM graduate, joined an edtech unicorn in Bengaluru—the city some refer to as India’s Silicon Valley—in a program manager’s role, with an annual pay package of Rs 35 lakh. Within a year, the startup shut down the business vertical, offering two months’ pay as severance to its laid-off employees. Over the next 8-10 months, Avinash continued searching for jobs before finally taking up an unpaid internship with a manufacturing firm in the energy sector. Two months later, the company offered him a contractual role, but with a pay cut of around 45 percent from his previous job.

“I had an education loan, rentals, and my parents’ health expenses to cover during those months. Luckily, I had friends from whom I borrowed money to sustain,” said Avinash. His name has been changed on request to protect his identity as it could affect his future employment opportunities. Avinash has now moved to his hometown in Kerala, and is working remotely to save on expenses. “I am still repaying the loans I had taken, so I had to cut my cost of living,” he says. The IIM grad continues to scout for better opportunities and plans to move back to Bengaluru when an opportunity arises.

Avinash’s experience epitomises the difficulties many techies, especially those in program manager roles, have been facing. These executives have been finding it tougher to find job opportunities as their functions are getting replaced or transitioning, which requires additional or a different set of skills. This is a part of the wider layoffs in the tech industry. In 2022, over 1,000 tech companies laid off over 150,000 employees. According to Layoffs.fyi, a website that has been tracking reported job cuts globally, in 2023 alone, over 800 tech companies laid off over 200,000 workers.

This comes after tech companies saw a blockbuster year in terms of venture capital in CY 2021 and 2022, which led to inflated salaries, higher attrition, hyper-growth and a battle to hire and retain better talent, which eventually became a jobseeker’s market.

According to data sourced from Weekday, a platform that helps in hiring through referrals, unicorns in India pay Rs 30-45 lakh per annum to techies with around four years’ experience, while the salaries of graduates from the IITs and NITs (usually with two years’ experience) start anywhere between Rs 13-28 lakh per annum. Experts say that while salary packages of other professionals in the tech industry, such as those in HR or marketing, have taken a severe hit, techies in product roles or engineering roles continue to be paid in the same range, but with fewer opportunities.

Moneycontrol spoke to over a dozen techies, most of whom were hired at twice their salaries in 2021 but soon lost their jobs and have been struggling since, to get a sense of the challenges they face getting a job.

Experts say that overhiring by companies was one of the reasons for the layoffs, as companies overestimated their growth prospects. For instance, Amazon hired more than half a million, doubling its workforce between September 2019 and September 2022. Meta also nearly doubled its headcount within a few months in 2022. Tech companies such as Microsoft, Google, Snap, and Salesforce also hired thousands during the same period.

This led to a common problem for HR departments and founders. Employees had multiple offers and so would continue negotiating for higher salaries. Many would accept the offer but ghost the company—not turn up on joining day—while many others were moonlighting and continue to do so.

However, with the economic downturn, companies, particularly startups, found it hard to raise venture and debt capital. This forced them to start focusing on their runway, current products, profitability, and halt their growth plans, which led to highly paid tech talent being let go. From quiet layoffs to finding performance issues and putting employees on the PIP path (performance improvement plan, after which many are laid off), to benching employees, IT companies are taking all kinds of measures to trim their human resources. This comes at a time when the total venture capital in the startup sector funding plunged to $3.8 billion in the first six months from $18.4 billion a year earlier.

“If the startups were cautious about the liquidity in the market, we could have avoided this situation. Some hired five times more than they could actually afford, assuming that the liquidity in the market would remain constant. Also, many sectors misjudged the situation and expected everything to move online, which eventually did not happen,” said Anshuman Das, co-founder and CEO of staffing and recruitment firm Careernet. “This time, the frenzy we saw in the tech sector was very high. In the earlier downturns, the tech industry was small, so this kind of tech meltdown was unprecedented.”

Rita Acharya joined a reputable IT company last year after it offered her a 100 percent hike from her previous salary, again in the role of a program manager. It was an offer she could not refuse. But, soon after joining, she found out that the workload was light, which took her by surprise. “I then got to know that there were too many people and too few projects,” she told Moneycontrol.

A few months before her appraisal, Acharya received an email asking to serve the next 15 days as notice period, without any severance pay. That would mark the beginning of a long search for a job. Acharya left no stone unturned, reaching out to peers and former colleagues, and joining several groups on WhatsApp and social media in her job hunt. But she says that the roles she’s looking for are not in demand. “I do not have coding skills and most companies are now looking for people who can handle both tasks,” she says, adding that upskilling is a slow and time-consuming process.

Program managers are usually hired under various designations across companies and industries, but their responsibilities mainly focus on overseeing project timelines, quality and performance of projects, and co-ordinating cross-project initiatives, to name a few.

Shantanu Rooj, founder and CEO of TeamLease EdTech, said that the program manager role was significantly affected during the peak of the layoffs. “These roles now require client servicing, negotiating with them and so on, so this particular role is undergoing a major transformation and becoming more of a quality customer lead. We are also seeing roles like data monetisation managers, digital change managers.”

Rooj added that artificial intelligence is undeniably influencing the role of program managers, especially in the EdTech sector. “Automation, powered by AI, has streamlined many routine tasks. Take scheduling and resource allocation, for example. What used to take hours of manual cross-referencing and adjustments can now be optimised in minutes with AI tools. This newfound efficiency allows program managers to shift their focus from administrative tasks to more strategic endeavours, such as exploring innovative teaching methodologies or enhancing student engagement techniques,” he pointed out.

“The program manager role has probably outlived its time, and if they cannot adapt to the change, they will lose their positions.”

Until the middle of 2020, Subhabrata Deb was working with a prominent food tech company as a program manager when he was laid off with two months’ severance pay. After a difficult 14 months of job hunting, the 36-year-old doubled his previous salary by joining an IPO-bound startup. But since he was being paid handsomely in a tough job market, Deb found himself carrying out responsibilities that were very different from what he was accustomed to. He was fired a year after joining the startup.

Deb, who is still hunting for a job, said the current market is worse than in 2020, when he was still getting a few calls or responses from recruiters. “This feels like I’ve hit a wall with no interest from companies,” he said.

Like Deb, apart from program managers, even mid-senior techies are struggling to find opportunities and are resorting to consulting or taking pay cuts to sustain themselves.

Techies like Deb and Acharya are also spending thousands of rupees to upskill themselves. However, Rituparana Chakraborty, co-founder of TeamLease says that while upskilling is necessary, it is not an immediate solution.

“Companies are looking to save or cut their fixed costs and program managers, top executives or CXOs (chief experience officers) are not directly billable, hence they have been affected more,” she adds. “And even if they upskill, the companies are not hiring extensively, so it will be difficult.”

But, she adds that companies are still spending partially on expertise so consulting or freelancing could help some techies earn an income.

Chandra Shekhar Garisa, chief executive officer of job search platform Foundit (previously Monster), said that the commitment of an organisation towards its employees and vice versa has changed. “It's more about compensation rather than long-term growth, career graph, or other elements. Even the company does not commit to its employees and resorts to layoffs at any time of crisis.”

Hari, who has around 15 years of experience, was hired at an annual salary of Rs 68 lakh ($82,000) by one of the most funded edtech startups in 2021. A year later, the startup started laying off thousands of employees. This made him apprehensive and he found a job with a rival firm, which bumped his salary up to Rs 75 lakh ($90,000). But, the joy was short-lived. He was laid off from this role within six months of joining as the company was looking to cut costs.

For months, Hari, who requested to be identified with a pseudonym, has been looking for jobs without any success. “Getting hired at such packages is not easy, especially in such a dry market,” he says. He is now doing some consulting work and also working on his own startup plan. “My only relief is that I do not have financial liabilities, as I cleared all my loans and my wife is also working so the daily expenses are being taken care of.”

Careernet’s Das told Moneycontrol that CXOs, who are usually responsible for driving business growth, enhancing customer experience and orchestrating many business strategies, are finding it even harder because they add significantly to the expenditure of any company. Unless a company has a long-term vision about the hire, they remain hesitant to fill such roles, he added. At these uncertain times, most companies have put their plans on hold, making it difficult for these executives.

Data sourced from staffing firm Xpheno also shows that the first five months of FY2024 (April to August 2023) have seen a little over 130 CXO movements, which is a 40 percent YoY drop in comparison to the same period of the last financial year. While demand for CXO roles has been on the rise since June this year, the movements are seen to be dipping as the rewards are not as high as in 2021. C-suite movements during the highs of 2021 were extremely rewarding on compensation and benefit packages. One-time goodies were common during that period. These have been removed since late 2022, according to analysis by Xpheno.

TeamLease EdTech’s Rooj said that while mid-senior professionals gained the most post-Covid, they have also been impacted the most after the layoffs started. “Companies saw that the return on investment (ROI) was not high, so they preferred to continue hiring in junior roles and train them rather than hiring at mid-senior levels.”

However, salary negotiations have now come down to 15-30 percent hikes from 50-100 percent, which had become the norm in 2021, said Rooj. He added that as salaries are now becoming reasonable, increments are moderate and tech companies are not over-hiring, so the industry is stabilising.

After a five-month hunt, Acharya has joined as a project manager in a Bengaluru-based company with a 15 percent pay hike. “I am satisfied with the hike. I can at least start with our family planning, help my husband with the EMI of our home loan, buy a car–everything was on hold.”

However, many like Deb and Hari are still looking out for suitable roles.

Sanghamitra Kar is an independent contributor.