Will Big Tech's global layoffs damp recruitments in India?

However, any ripple effect of these global layoffs is likely to be minimal in India. Yet, these employee cuts will likely dampen lateral and campus recruitments, as well as constrain rewards for employees as cost pressures mount, analysts said.

In the beginning of the year, hundreds of employees at Google and Amazon were laid off globally, but their India units have remained unscathed so far. In a note on an internal platform accessible to Google’s employees, a copy of which was seen by Mint, the company disclosed that over 700 employees were laid off in the US, as well as a handful of others across Australia, Canada, China, and Switzerland. There was no mention of any layoff from within Google’s India teams. At least two executives at Google told Mint on the condition of anonymity that the company has not issued any intimation of a potential downsizing of teams in India, for now.

“There might not be any significant direct impact on India—a lot of tech jobs remain in freeze in India already, and even if there are no direct impact of Google or Amazon’s layoffs in India, it may affect teams here if a certain team is targeted to be slashed," said Akshara Bassi, senior research analyst at research firm Counterpoint.

Google, according to the note, is offering a severance pay of 14 weeks to the employees who were asked to go, plus an additional week’s pay for every year completed at the company.

Between 10 and 11 January, the US-based search-engine giant started its retrenchment process across teams that included privacy, safety and security (PSS), developer and corporate engineering in its ‘core’ division, Geo in its Knowledge and Information (K&I) division, Devices and Services Product Area (DSPA).

An internal email sent to the retrenched employees in Google’s Geo team within its K&I division, which builds products that include Google Maps, said, “We are making changes to deliver on our vision and strategic plans with greater velocity, which include some workforce reductions, closing many open roles, being selective on backfilling attrition, and reshaping of leadership roles. In most cases, we are consolidating roles or taking steps to flatten our organization structure and create clear ownership."

A copy of this email was seen by Mint.

Meanwhile, at Amazon, a note by Mike Hopkins, senior vice-president for Prime Video, sent to employees on 10 January, said, “We’ve identified opportunities to reduce or discontinue investments in certain areas, while increasing our investment and focus on content and product initiatives that deliver the most impact. As a result of these decisions, we will be eliminating several hundred roles across the Prime Video and Amazon MGM Studios organization."

The retrenchments appear to have become an annual ritual now, after more than a year of large-scale hiring. Last fiscal, Google laid off 12,000 employees, joining its Silicon Valley peer Meta, Facebook’s parent, which announced 11,000 job cuts. Amazon and Microsoft had respectively trimmed their workforce by 18,000 and 11,000 earlier. While last year’s global layoffs had a more pronounced impact on tech hiring in India, this year’s retrenchments so far may yet be muted.

“Companies that have large exposure to North America and European markets will see their new headcounts frozen in India, and those who are in the higher end of the compensation brackets will not even be considered for replacement hiring," said a partner working on compensation and rewards in one of the leading global consulting firms.

Counterpoint’s Bassi highlighted that the global macroeconomic situation is not optimal, since high US interest rates are making access to funds difficult for smaller teams, companies and ventures. “Big Tech won’t be immune to this, since they will also look to trim certain teams. Google’s revenue has grown, but their growth pace has been slower—which causes them to track back on certain teams to reduce costs," she added.

Google and Amazon did not respond to queries on the impact of global layoffs on their India operations.

Recruiters, meanwhile, say the impact on India will be felt by their clients and subcontractors. “Big Tech and IT services firms have reduced their subcontracting costs over the last one year, and it will further come down. So far, even the hiring in India has lagged behind US by a couple of quarters, and that has worked for the domestic market as the freeze comes in," said Prasadh M.S., head of workforce research and analytics at recruitment firm Xpheno.