Its just 16 days in the New Year and the bad news is already in. You open likedIn today, and it is filled with people sharing their heartbreaking stories of layoff. How people went to office like they usually do, but returned home being told that they don’t need to come back to work from tomorrow onwards. People are literally, desperately crying for help, there are accounts of people breaking into tears when told about they are being laid off.
But then that’s what it is. 2023 has been brutal. In just first 16 days, more than 24000 tech employees have lost their jobs. Now to give you a sense of comparison, In 2022, according to a data, total layoff by 1024 tech companies stood at 1,54,336. Now, in just first half of 2023 january, as many as 91 tech companies have let go of their employees.
What’s happening in job market? Why these mass layoffs? And what the salaried employees are staring at in 2023? Let’s discuss in today’s show.
But before that…
Among the 91 tech companies, there are some big techs too.
Amazon
It started with Amazon, whose founder Jeff Bezos is the 4th richest man in the World. Amazon CEO Andy Jessy last week had announced in a blog post that the company will carry out a retrenchment exercise. Under this, the company planned to cut roles across organization. The Restructuring is said to be impacting almost 18000 workers globally. While in India, the exercise will impact about 1000 employees of the ecommerce giant.
In the blog post, Jassy said, “In November, we communicated the hard decision to eliminate a number of positions across our Devices and Books businesses, and also announced a voluntary reduction offer for some employees in our People, Experience, and Technology (PXT) organization. I also shared that we weren’t done with our annual planning process and that I expected there would be more role reductions in early 2023.”
The plan to cut roles, was implemented as soon as 2023 rung in. The layoffs at Amazon have resulted in the elimination of various roles across tech, human resources and Prime verticals in India.
Meanwhile, The Pune Labour Commissioner’s office has taken note of the mass layoff and sent a notice to Amazon. It has summoned the e-commerce major on 17 January. In November 2022, after the request from Nascent Information Technology Employees Senate (NITES), a welfare organisation for IT and its related sector employees in India, India’s labour ministry too had sught response from Amazon. During which it said that new employees are leaving under the VSP plan. VSP means voluntary separation program . The plan allowed employees to resign voluntarily from employment in exchange for the specific severance benefits. These included 22 weeks base pay, one-week base salary for every six months of services (up to a maximum of 20 weeks) among other benefits.
There have been experiences posted by employees being laid off on either LinkedIn or Grapewine that talk about employees breaking down and crying in office and the gloomy environment.
Sharechat
No sooner than Amazon, Sharechat too laid off 500 employees in the last 2 days. The company laid off 20% of its staff. Mohalla Tech, which owns the video-sharing app, as well as short duration vertical content app moj, said it made the “difficult” decision due to concerns of a sustained economic downturn. In an internal note to employees, company’s CEO Ankush Sachdeva reportedly said that this has been done to ensure the financial health and longevity of our company in the current uncertain macroeconomic environment. He also said that the company overestimated the market growth in the highs of 2021 and underestimated the duration and intensity of the global liquidity squeeze.
The move came even as in December last year, the company shut down jeet11 a fantasy gaming app that impacted about 100 employees.
Sharechat which is valued at $5Bn, and has 180 million active users, boasts of being India’s first homegrown social network, offering content in Indian languages. Almost a year back Sharechat turned Unicorn. It is backed by tech firms such as Google and Temasek and had raised $300m in fresh funding last year. It also counts Twitter, Snap Inc and Tiger Global among its investors.
The company however, is not hanging the laid off employees dry. The impacted employees will be receiving the entire salary of their notice periods, two-weeks’ pay for each year served and 100% of the variable pay till December 2022. Also, the company will allow impacted employees to encash unused leave balance of up to 45 days. health insurance cover till June-end 2023. the employee stock option plans (ESOPs) will continue to vest till April 30, 2023, with the impacted employees retaining all of their vested ESOPs.
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OLA:
The layoff season has also impacted employees of ride hailing app Ola. As many as 200 employees were laid off from the company. The layoffs have happened across the ride-hailing, electric vehicle and fintech businesses The company however downplayed it saying that downsizing round was part of their restructuring exercise.
In September last year, it was widely reported, based on the data from frontline workforce management platform Better Place that in 2023 India’s blue-collar jobs market is likely to create a record 9 million jobs. However, the Hiring boom good news did not last long. In the last three months of 2022 itself, the tech companies laid off much of their workforce.
Another startup Cashfree laid off 100 employees. Homegrown quick-grocery delivery provider Dunzo has laid off 3 per cent of its workforce amid cost-cutting measures.
Voice automation firm Skit.ai laid off about 115 employees. Salesforce is laying off 10% of its Global Workforce while crypto exchange firm Coinbase is firing 950 employees or 8% of its global workforce. Last year in June it laid off 8% of its India team. This year’s layoffs are third round.
Google is another Big Tech company expected to take harsh steps to reduce its headcount in early 2023. Google layoffs in 2023 could see as many as 11,000 employees lose their jobs globally.
So for salaried employees the year has begun on a bad note. Meanwhile, Union Minister for Micro, Small and Medium Enterprises Narayan Rane also sounded alarm over recession. Addressing the media in Pune on Monday, Rane said India was likely to be hit with recession after June and the Centre was working towards handling it effectively and minimising its impact on the country.
The question now is very clear that the layoff season is coming and Indian employees are being impacted by this. Does the govt have a plan to mitigate this crisis? And if yes what is it?
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