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How layoffs in tech industry is good news for India

The big tech giants, such as Google, Microsoft, Uber, Apple, Tesla, and even Meta, are facing tough times.

October 06, 2022 / 05:29 PM IST
Representative image.

Representative image.

It's all the rage that tech companies are laying off employees. To cut costs, big companies like Google, Microsoft, Uber, Apple, Tesla, and Meta are laying off their employees.

There is more to the story than meets the eye. What's happening?

The big tech giants such as Google, Microsoft, Uber, Apple, Tesla, and even Meta, are facing tough times. Business Insider reported that Google, a major global tech company, recently warned its employees, "if next quarter results don't look good, there will be blood on the streets".

In the past few months, Apple has fired about 100 contract-based recruiters who are responsible for hiring new employees. During the second quarter of FY22, Twitter's hiring process slowed significantly.

Research & Development employees at Microsoft were laid off in 200 cases. Approximately 200 Tesla autopilot employees were also laid off. What is the reason for these layoffs? These companies' revenues have decreased.

Alphabet, Google's parent company, reported profits of $16 billion in Q2FY22, down from $18.5 billion a year ago. A year ago, the quarterly revenue growth was 62 percent, but this quarter's revenue growth was 13 percent.

As a result of the one percent decline in revenue to $28.8 billion, Meta reported its first-ever yearly revenue decline. Despite the decline in profits, the company still turned a profit of $6.7 billion.

In addition, Microsoft missed expectations as well. Over the past two years, it has generated $51.9 billion in revenue, which is its slowest revenue growth.

These companies are laying off their employees to save money. However, this is not the whole story; it goes deeper.

Shortfall of Skilled Employees

The US Federal Reserve is trying to tame inflation. Therefore, rate hikes and recession fears are evident. As a result, these companies are choosing to remain cautious.

Also, due to inflation and rate hikes, companies will have to spend more than they did before. As a result, recruitment is being avoided in order to save on expenses.

It has been 16 years since the shortage of skilled workers in tech companies around the world reached a 16-year high, according to a survey by ManpowerGroup.

India may have the talent that the world is looking for

In a recent interview, Mr Rishad Premji, the Executive Chairman of Wipro Ltd, said that for the past 25-30 years, global firms have mainly been coming to India for cost, staying for quality, and now we've become a true talent destination of the world.

As a result, global companies seeking talent could offer Indian tech talent remote working opportunities, which could be a game changer for the country.
Moneycontrol News
first published: Oct 6, 2022 05:29 pm