The threat of layoffs in the Indian tech industry is rearing its head again. According to recent data from layoffs.fyi, 7,175 people were laid off in the first six months of 2024. This is a 31 per cent increase compared with the second half of 2023, when the number was 5,474. But the number is lower than the 10,924 layoffs witnessed between January and June 2023, when edtech major Byju’s sent out a flurry of pink slips.

Thillai Rajan, Professor in the Department of Management Studies at IIT-Madras, explained, “Organisations often do not invest sufficiently in skilling, reskilling and organisational training to meet newer requirements. This lack of investment, along with inadequate resource allocation, can contribute to frequent layoffs.”

Out of the 7,175 layoffs in the first half of 2024, Paytm accounted for 3,500 layoffs, representing 49 per cent of the total. It was followed by Flipkart with 15 per cent, Byju’s - 7 per cent and Swiggy - 6 per cent.

Paytm received a setback due to the Reserve Bank of India’s clamp down on its payment bank arm. Flipkart, on the other hand, conducts performance-based job cuts annually. Byju’s is facing financial crunches and legal disputes, which are the primary reasons for layoffs in the company.

Sector-wise data

In the given period, sector-wise data show that finance, retail and education faced the highest share of layoffs in the Indian market, with 51 per cent, 18 per cent and 15 per cent, respectively.

Rajan said, “Within the finance sector, fintech has faced significant challenges, including numerous layoffs, due to rising complaints and regulatory issues. The retail sector has been evolving over time, with growing demand for new skills. Consequently, one set of skills is being replaced by others, leading to increased layoffs in the retail sector. Additionally, the full effects of restructuring during the Covid-19 period have not yet been fully manifested, contributing to high layoffs in the education sector.”

Cities such as Noida saw the highest number of layoffs, with 3,500, followed by Bengaluru with 3,126 layoffs, and New Delhi with 295 layoffs in 2024 (January to June). These are leading cities in India that host the highest number of big companies and attract a large youth workforce.

A cross-country analysis reveals that overall layoffs have decreased in leading countries in the first half of 2024. The US witnessed layoffs decreasing from 1.4 lakh in the first half of 2023 to 67,806 in the first half of this calendar year. Germany saw 12,755 layoffs in the first half of 2023, which fell to 8,900 in 2024 (January to June).

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