Have Tech Companies Frozen Hiring? | Unbreak the News with Prema Sridevi | Ep: 95

Tech Layoffs, Top IT companies and tech firms in India like Infosys, Wipro and the likes are revoking offer letters given to potential employees. Many youngsters who were given offer letters after several rounds of exhaustive interviews are today staring at a bleak future. The looming recession fears and the apprehensions over the growth slowdown in IT industries are pushing companies to take harsh HR decisions. How bad is this situation really? Prema Sridevi UnBreaks this News for you!

(Produced below are the abridged version of the transcripts of the video explainer from Episode: 95 | UnBreak the News with Prema Sridevi | Title: Have Tech Companies Frozen Hiring?) 

Tech Layoffs 2023

Top IT companies and tech firms in India like Infosys, Wipro and the likes are revoking offer letters given to potential employees. Many youngsters who were given offer letters after several rounds of exhaustive interviews are today staring at a bleak future. The looming recession fears and the apprehensions over the growth slowdown in IT industries are pushing companies to take hard HR decisions. How bad is this situation? Let’s UnBreak this News! 

The writing is on the wall. IT companies are stepping up measures to face a possible economic meltdown. Some companies have postponed the variable pay to their employees, others have slashed the pay, and many have just deferred it indefinitely. Numerous companies have frozen their recruitment processes. Others have revoked the letters sent to potential employees. Companies have enlisted various reasons for not hiring people who were promised jobs. Amongst all the excuses, what’s missing is the real reason: fears of a looming recession. 

In a letter sent to a fresher, a tech giant states: “We noticed that your offer letter was released, and there has been no response from your end despite multiple reminders. We will not be able to provide any further extensions and will not proceed further with your candidature. Your recruitment journey ends here.”

In another communication sent by an IT company to a potential employee, the HR department says: “We regret to inform you that we cannot take your candidature forward as you have not complied with the company’s assessment guidelines.”

Yet another company sent this email to a fresher, and this takes the cake. “It has been identified that you are not meeting the eligibility criteria mentioned during the recruitment process. Hence your offer letter stands null and void.” When this email went viral on social media, netizens questioned the company about why the offer letter was sent in the first place if eligibility criteria were not met.”

According to media reports, even Facebook, Google, and Microsoft have put their new recruitments of freshers on hold. Recently, the top boss of Wipro, Rishad Premji, disclosed that his company had fired around 300 employees for moonlighting. Moonlighting is a practice where an employee secretly takes up another job while on a company’s payroll.

However, market watchers say the real reason behind these Tech Layoffs is not what meets the eye. This grim scenario is not just in India. Reports suggest that in the Tech sector alone, more than 42,000 workers in the US have been laid-off in mass job cuts in 2022. 

The war in Ukraine, rising interest rates, and high inflation have all affected the job markets. A KPMG survey recently found: “Over the next year, more than 8 out of 10 (86 per cent) global CEOs anticipate a recession to hit, with 71 per cent predicting it will impact company earnings by up to 10 per cent.”

In a report released this week, the United Nations has warned that the policies of rich nations are pushing the world towards a recession that will cause worse damage than Covid-19. The report further states that India would grow at 5.7 per cent in 2022 and further slow down to 4.7 per cent in 2023. 

The UN has said excessive policy choices could trigger an economic downturn worse than the 2008 recession. Scary as it may seem, all hope is not lost. There is still time to induce radical reforms, take corrective steps, and calm the markets. The winters and the upcoming new year will test the resilience of the Indian economy.