Mass layoffs by tech giants: A Global trend carving roadmap to recession
Chandigarh, November 07: Apple, Google, Microsoft, Twitter, Byjus-you name it and the search engine data will tell you how every other tech giant is planning mass layoffs, if not done already. But why are mass layoffs happening? Why the IT sector boom is taking a U-turn? And is your company too planning to fire employees? Is the world heading towards the worst ever recession?
Also Read| Delhi AQI improves: Centre lifts restrictions imposed 3 days ago
Well, all the above questions are legitimate enough to give you sleepless nights. However let us first find out that why are these Multinational IT companies laying-off employees and freezing their recruitments.
Global economy crunch
Skyrocketing inflation has affected economic activity adversely. In order to control it, authorities have raised interest rates, and then Russia-Ukraine conflict has enormously affected macroeconomic activities across the world. With prices of daily need commodites rising, economies are feeling the crunch. As a result, tech companies are forced to look deep into their expenses and take necessary decisions to cut costs and reduce budget.
Recession coming our way?
A survey of more than 1,300 chief executive officers (CEOs) at the world's largest businesses reveals that over the next year, 86 per cent of these global leaders anticipate a recession to hit. However, 58 per cent of these leaders expect the recession to be mild and short.
Fourteen per cent of senior executives identify a recession among the most pressing concerns today -- up slightly from early 2022 (9 per cent), while pandemic fatigue tops the list (15 per cent), said the survey -- the KPMG 2022 CEO Outlook. These leaders were asked about their strategies and outlook during the survey.
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, said the survey. A strong majority of senior executives believe that a recession will disrupt anticipated growth (73 per cent). However, three-quarters (76 per cent) have already taken precautionary steps ahead of a looming recession, it added.
Where India stands?
Highlighting India's robust economic health despite the COVID pandemic and geo-political situation, Union Finance Minister Nirmala Sitharaman on months ago said there is no question of India getting into stagflation or recession like other major economies of the world.
In her reply to the debate on price rise at the Lok Sabha, Sitharaman said, "We have never seen a pandemic of this kind. All of us were trying to make sure that people in our constituencies are given extra help. I recognise that everybody -MPs and state governments have played their role. Otherwise, India would not be where it is compared to the rest of the world." "So, I fully credit the people of India for this. Even against adversity, we are able to stand up and be recognised as the fastest growing economy," she said.
The Finance Minister emphasized that due to the measures taken by the government, India is in a much better position than most countries.
"Repeatedly in the assessment of global agencies, India remains the fastest growing economy in the assessment of global agencies. This House irrespective of the party should feel proud of the country and its people. State governments have helped," she stated in the Lok Sabha.
Referring to a survey, Sitharaman said there is zero possibility of India getting into recession.
Sitharaman said the Gross Domestic Product (GDP) of the US fell 0.9 per cent in the second quarter following a 1.6 per cent decline in the first quarter. "They start it calling an unofficial recession. There is no question of India getting into recession or stagflation," said the Minister.
"Pandemic, second wave, Omicron, Russia-Ukraine (war), even today largest supply components in China are under lockdown. In spite of that, we have held inflation well within 7 per cent or below. That has to be recognised," she told Lok Sabha.
She further said, "4,000 banks in China are reported to be going bankrupt. In India, the gross NPAs (Non-Performing Assets) of scheduled commercial banks is at a 5-years low of 5.9 per cent in 2022. So our NPAs are improving. The government debt to GDP Ratio of many countries is in triple digits including Japan, Greece, Bhutan, Singapore, the US, Portugal, Spain, France, Sri Lanka and Canada. But the central government very consciously controlled its debt and it is at 56.29 per cent of the GDP at the end of 2021-22 compared to the 59.9 per cent revised estimate that year."
Therefore, if you are working with an Indian firm, chances are that you may not feel the brunt of this global trend in near future.
Also Read| Govt issues guidelines for sugar export for 2022-23
- PTC NEWS
