New Delhi: Nearly 60,000 outsourced contract workers lost jobs in India’s IT sector in the financial year that ended in March 2023, according to a report in the Business Standard. The job losses come in the wake of a 7.7% decline in jobs for flexi workers hired through contractors as compared to the year before, the report said.
“The drop in new employment generation within the IT flexi staffing sector mirrored the global slowdown in IT hiring,” said Lohit Bhatia, president of the Indian Staffing Federation which represents over 120 recruitment agencies across the country.
The sector provided 177,000 jobs in the last financial year as opposed to 2,30,000 jobs in the year before, the report said.
Contract workers provided software solutions that helped businesses adapt during the pandemic as online shopping and remote work saw an unprecedented boom, the report said. However, the $194-billion sector is facing a slowdown this year as employees return to offices and the Russia-Ukraine war weighs on spending from clients in Europe.
A JP Morgan report also warned that 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, the Business Standard reported.
Bhatia said that the hiring of contract workers through a third-party may remain weak for the next few quarters in the software industry, according to the Business Standard report.
Meanwhile, India’s unemployment rate rose from 7.8% to 8.11% in April for the fourth consecutive month, according to Mumbai-based think tank Centre for Monitoring Indian Economy (CMIE).
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, The Wire reported. In continuation of that trend, nearly 1,600 tech employees were laid off per day on an average in January 2023 alone, the report said.