A latest report from Business Standard has shockingly revealed that nearly 60,000 outsourced contract workers lost jobs in India’s IT sector in the financial year that ended in March 2023.
Outsourced Contract Workers Lost Jobs In Indian IT Sector
Basically, this report talks about the job losses that happened in the wake of a 7.7% decline in jobs for flexi workers hired through contractors as compared to the year before.
According to Lohit Bhatia, president of the Indian Staffing Federation, “The drop in new employment generation within the IT flexi staffing sector mirrored the global slowdown in IT hiring.”.
This federation represents over 120 recruitment agencies across the country.
Moving ahead the report highlights that this sector provided 177,000 jobs in the last financial year as opposed to 2,30,000 jobs in the year before.
How Did This Happen?
It seems that the contract workers provided software solutions that helped businesses adapt during the pandemic as online shopping and remote work saw an unprecedented boom.
But now, the $194-billion sector is facing a slowdown this year as employees return to offices.
The Russia-Ukraine war weighs on spending from clients in Europe, again not helping the cause.
The soaring inflation, supply chain issues and the economic fallouts from the Ukraine war will bring an end to the growth boom that India’s IT services saw during the pandemic, as warned by a JP Morgan report.
The hiring of contract workers through a third-party may remain weak for the next few quarters in the software industry, the president Bhatia said.
In the meantime, India’s unemployment rate rose from 7.8% to 8.11% in April for the fourth consecutive month, as reported by the Mumbai-based think tank Centre for Monitoring Indian Economy (CMIE).
It appears that the loss of contract work in the IT sector is in line with the global IT layoffs that began in the first quarter of 2022 with around 400 tech startups firing more than 74,000 employees as per the media report.
The trend continues with nearly 1,600 tech employees laid off per day on an average in January 2023 alone, as per the report.
