The horror of mass layoff followed everyone in 2023 as tech giant Microsoft joined the race of mass firing. On Wednesday it was reported that Microsoft has also decided to join the layoff spree that is going on after the global economic slowdown. Reportedly Microsoft is likely to fire around 11,000 employees which in total amounts to 5% of their overall workforce. Microsoft has a total of 2,21,000 employees out of which 99, 000 are employed internationally while the rest are appointed in the US. Apart from Microsoft, Canadian firm Clearco has also decided to lay off 30 percent of the workforce. Ironically, the tech sector witnessed a boom during the COVID pandemic and now with the curbs now eased all over the world companies have been involved in a mass layoff. Interestingly, Microsoft is among the latest to join the list of companies that are laying off employees by hundreds and thousands. Now, the question arises why the tech companies of the world are mass firing and how it will be impacting Indians who are employed in a great number there.
Global layoff impact on Indians
Alphabet & Google CEO Sundar Pichai had warned of a coming winter in the tech sector last year. In an all-hands meeting in September this year, one of his responses to staff queries on budget cuts was, "We don’t get to choose the macroeconomic conditions always." A potential economic recession is a big red flag. With inflation soaring in most parts of the world, central banks have been scrambling since March 2022 to rein it in by increasing rates so as to make it more costly to borrow and consume. This will eventually affect economic growth and jobs. The International Monetary Fund (IMF) has cited forecasts for global GDP growth in both 2022 and 2023 as gloomy, given the pandemic and ongoing Russia-Ukraine war. Setting aside the 2008 financial crisis numbers, estimates for this calendar and the next by the IMF are the weakest since 2001.
Indians in the global IT Tech sector
As per reports, the Indian IT services firms are among the largest employers in the organised sector and any global economic trend is bound to have an impact on their growth projections. Managements look at headcount numbers critically when they want to cut costs and protect profit margins as they are accountable to investors. Though there isn’t a discernible trend yet, there are a few signs which may signal what is to be expected in the next few months. All top companies except Wipro saw a rise in revenue and net profit. Wipro’s net profit slid 9% from a year earlier for the quarter ended September.
In 2022, employees working for tech companies were majorly impacted by layoffs. Some of the biggest layoffs that took place were at Twitter and Meta. Together, the two biggest tech companies laid off thousands of employees, many of which were Indians living in the United States with H1B visa. At the time of announcing layoffs, Meta head Mark Zukerberg extended immigration support to foreign employees, but no such support was offered by Elon Musk-headed Twitter.
The H1B visa holders are under the most stress because they have a limited time of 60 days to find new jobs. For the unaware, if an H1B visa holder is terminated, they will have 60 days to find new jobs, and failing to do so the person will need to move back to their home country.
Recession and inflation in America
Reportedly, Corporate America is drastically reducing its workforce as part of its restructuring efforts to prepare for a probable economic downturn brought on by the U.S. Federal Reserve's fight against inflation and the war in Ukraine. The fact that this is only the beginning is troubling. According to a report in The New York Times, Amazon is ready to fire up to 10,000 workers mainly in its retail and devices divisions, making the e-commerce behemoth the most recent tech titan to impleme
Apart from technology giants, big Wall Street firms like Citigroup and Goldman Sachs have cut jobs and Morgan Stanley is also planning to slash jobs in the coming months. According to Johnson Associates Inc, a compensation consultant in New York, bonuses for investment bankers may plunge by 45% in 2022 as compared to 2021.
Is shifting to Canada after layoff a good decision?
Notably, Indians who have been laid off might think to go to Canada in a job hunt. However, shifting to Canada might not be a good decision as well. Canada is also going through mass layoff problems. Canada-based Clearco, an e-commerce investor providing equity-free capital solutions to e-commerce businesses, has laid off 30 percent of its workforce. This is the second round of job cuts, as back in July, Clearco laid off 125 employees or 25 percent of its workforce. Now, Clearco only has 140 staff, down from 500 just last year, according to the report.
However, as compared to the US, Canada's condition is not that much in turmoil. In November last year, Canada added 10,000 new jobs across sectors. A survey conducted by the Labour Force observes the trend. The employment participation rate decreased to 64.8% while the unemployment rate decreased by 0.1 percentage points to 5.1%. The report showed that the average hourly salaries of employees stayed over 5% for a sixth consecutive month in November, up to $32.11, despite this very modest job increase beginning in November 2021. This indicates that immigrants will have more employment chances with higher earning potential in the following days.
(Inputs- IANS)