Indian software company giant HCL technologies has reportedly laid off upwards of 300 employees, whilst the IT giant braces for setbacks in harsh market conditions, signaling concerns of a looming global crisis.
Per reports from Moneycontrol, 350 employees globally, ranging from India, Guatemala and the Philippines, to name a few who were primarily working on its client Microsoft’s news outlet, MSN were let go by the Indian software company at a town hall meeting last week.
The company was reported to have stated that the last day of employment will be September 30 for the laid-off employees, and each and every employee who were fired during this period would be awarded severance pay.
An anonymous source stated that service employer Microsoft was unsatisfied with the quality of the work done for their MSN news outlet. The MSN team was responsible for multiple tasks, including monitoring, editing and curating content for publishing on the outlet’s online platform across multiple regions.
Before HCL Technologies took up the MSN contract from Microsoft, Burda Media, part of German media group Hubert Burda Media Holdings was responsible for maintaining the MSN newsroom. Recently, Microsoft has started automating their moderation and monitoring process for global news, further reducing their dependance on third-party vendors.
Sources close to the matter have mentioned that HCL’s contract with Microsoft has ended, and Microsoft is expected to pass on the contract to some other vendor, possibly competitor IT company, Accenture.
Officially, the company declined to comment on these statements. “Our Technology & Services vertical continues to see robust growth and is one of our fastest growing sectors,” HCL Technologies mentioned in a statement.
This move comes at a time where a global paradigm of reduced hiring and increased layoffs in efforts to cut costs is prevailing, ahead of concerns of a global inflation crisis.
Reports state that job cut rates have increased across companies globally and have significantly reduced hiring, some even stopping completely. From the month of August, at least 50% of companies are considering laying off large swathes of employees, reducing pay, rescinding supplementary pay and cutting down on job offers. The effect is especially felt in Big Tech, with corporations like Apple, Google, Microsoft, to name a few letting go off employees in large numbers, even dissolving entire departments, citing concerns of a looming economic crisis.
In the United States alone, just till the month of July upwards of 30,000 people working in the tech field have found themselves out of a job, especially at Big Tech corporations of the likes of Microsoft and Facebook parent company Meta, with Google and Apple hinting at mass layoffs in the near future as well. With tech companies faring poorly in the markets as of late, one can assume that the worst is not over yet.
In India, since the beginning of the pandemic in April of 2020, the tech industry has been facing a difficult time as well, with more than 25,000 jobs in just the startup ecosystem being cut down, and upwards of 12,000 layoffs amongst MNC’s. Bengaluru-based Infosys currently maintains the highest attrition rate in the industry at 28.4%, followed by Wipro at 23.3% and Tech Mahindra at 22%.
HCL Technologies is only one of many Indian IT companies going through a rough patch. Rising concerns of global inflation, along with economic pressures caused due to geopolitical tensions with Russia and China have contributed to a decline in the market in general, and troubles with supply chains have especially hit tech companies hardest, spelling trouble for Indian IT giants like TCS, Wipro, and Infosys as well.
Due to the global circumstances, costs have increased, thus increasing margin pressures on these companies. Concerns over tightening budgets at U.S. and European clients who have especially been affected by the Ukraine-Russia conflict and are hurtling towards a winter recession, have considerably contributed to the matter. The biggest Indian IT service firms have been forced to respond by cutting down on hiring, rescinding bonuses, and make large-scale dismissals, in anticipation of steep declines in profits, as a pandemic-induced boom eventually fades out.
The Indian IT industry saw huge profits during the pandemic, when reliance on the digital world and tech sales were booming. Global corporations have spent millions of dollars setting up robust networks in order to cope with the sudden uptick of online users, but several companies at the same time also underachieved profit estimates, due to higher costs caused by supply chain issues, and global shutdowns.