Lay-Offs in the Global Information Technology Sector and Its Impact on the Indian Economy

Juhi  Kumari; Sanjay  Kumar

doi:10.21844/crr.v1i02.1108

Juhi Kumari Research Scholar, Department of Commerce, Deen Dayal Upadhyaya Gorakhpur University, Gorakhpur, India
Sanjay Kumar Assistant Professor, Department of Commerce, Bareilly College, Bareilly, India

DOI: https://doi.org/10.21844/crr.v1i02.1108

Keywords: Indian service sector, IT giants, lay-offs, Recession

Abstract

The Indian service sector has been proven as the most crucial sector in the Indian economy as it contributes around 55% of the Indian GDP. This sector is quite diverse as it includes industries such as information technology, tourism, banking, healthcare, education, insurance, financial services, and others. The information technology industry has played a key role in revolutionizing our service sector. IT giants like Infosys, HCL, TCS, Accenture, Wipro, Cognizant, and others are the largest providers of employment opportunities along with becoming the catalyst behind the rapid growth of the Indian economy. These companies are the backbone of many other companies in India as technological solutions are being used by many production and service sector companies. However, in recent years, the IT industry has failed to meet expectations as many employees are losing their jobs due to layoffs in many IT companies. Generally, decisions regarding lay-offs are taken for strategic and economic reasons but this time, some unavoidable reasons are forcing companies to cut down the size of their workforce to retain their healthy positions.
This study is descriptive and qualitative which is based on secondary data. However, this paper is an endeavour to look into the reasons behind huge layoffs in the IT industry. Demonstration of available data is done through tables, bar diagrams, and pie charts. This research work is also intended to analyse the impact of such lay-offs on the Indian economy. After analysis, this research finds that the explanation of poor performance or incompatibility given by these IT companies behind these lay-offs is not completely true because the actual reasons are: excessive hiring during the boom phase of the post-pandemic period and forthcoming recession in the global economy. Lastly, this paper also provides some suggestions to restrain the situations of mass lay-offs and the trap of global recession.