IT layoffs: Nearly 3,600 contract workers lost jobs in March quarter in Indian IT sector

Layoffs have continued to make headlines this year in India, and most seem to be centered around the information technology sector. According to a recruitment body, nearly six per cent of outsourced contract workers lost jobs in India's information technology sector in the January-March period compared to the previous quarter following the impact of the global slowdown and Russia-Ukraine war.

The Indian Staffing Federation, a body of 120 recruitment agencies which provided about 60,000 outsourced workers, said nearly 6 per cent or about 3,600 of these workers lost jobs in the March quarter, Reuters reported.

Nearly 5.1 million workers were employed in India's IT sector in the year ending March 2022, according to government estimates, and companies have fired thousands of contract employees while holding on to hiring.

The drop in new employment generation within the IT flexi staffing sector mirrored the global slowdown in IT hiring, Lohit Bhatia, president of the Indian Staffing Federation, said.

The hiring of flexi workers in the IT sector shrank 6 per cent quarter-on-quarter in the March quarter, Bhatia said, noting that hiring of contract workers through a third party may remain weak for the next few quarters in the software industry.

It must also be noted that India's unemployment rate in April rose for the fourth month in a row to 8.11 per cent, from 7.8 per cent in the previous month, according to Mumbai-based think tank Centre for Monitoring Indian Economy (CMIE).

The Federation said overall demand for flexi workers slowed down in other sectors as well, adding 1,77,000 jobs through vendors in the financial year 2023 ending in March, compared with 2,30,000 workers in the previous year.

(With Reuters inputs)

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