Get All Access for $5/mo

Is Recession Approaching for India? Layoffs Have a Story to Tell Even though there is no recession in the country, big tech giants like Microsoft, Cognizant and IBM are witnessing some notable layoffs this across the technology sector.

By Nidhi Singh

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.


If you dream of working for one of the big technology names in the industry then the news of companies planning layoffs might decrease your chances of fulfilling that dream.

Even though there is no recession in the country, big tech giants like Microsoft, Cognizant and IBM are witnessing some notable layoffs this across the technology sector. With increasing pace of layoffs, this year the number of employees who will lose their jobs are likely to be more compared to last few years. The Indian startup ecosystem along with big companies also couldn't save itself from various problems like funding and investments.

As per various media reports, American Information Technology major Cognizant, is likely to cut at least 6,000 employees which are equal to 2.3 per cent of the total workforce. The decision could be a result of the impact of machine learning in IT sector or strict stand of US government over H1B visa rules for Indians. At the end of December 2016, the software company had 2.60 lakh employees globally with 72 per cent based in India.

The US government has recently also announced the temporary suspension of the fast-track processing of H-1B visas, leaving many foreign workers nowhere. The H-1B visas allow skilled workers to come to the US temporarily. The one country which will get excessively affected by this decision is India, from where many skilled immigrants come to the US to work on H-1B visas.

"As part of our workforce management strategy, we conduct regular performance reviews to ensure we have the right employee skill sets necessary to meet client needs and achieve our business goals. This process results in changes, including some employees transitioning out of the company," A Cognizant spokesperson said in a media statement.

Last year, San Jose, California-based Cisco also announced that it will cut up to 5,500 positions, about 7 per cent of its global workforce, beginning in fiscal 2017.

Apart from issues like funding and revenue, the Indian IT sector is losing jobs because of automation.Big names like Infosys and Wipro have released more than 8,000 employees in the past one year due to automation of lower - level roles.

Layoffs in the E-commerce Sector Not New to India

Along with the IT sector, the e-commerce sector is also facing the heat due to the rapidly changing technology trends. The e-commerce industry is not new to layoffs as the last year saw too many companies reducing their workforce.

In August last year, the consumer internet search platform AskMe had to shut down its operations, laying off rest of its staff. The company took the decision citing severe cash crisis reason.

Another e-commerce major Snapdeal is planning to cut down its workforce as it looks forward to saving cash. The company will layoff about 600 employees from the company including from its logistics unit (Vulcan) and payments (Freecharge) divisions. In an internal email to employees, the company co-founders Kunal Bahl and Rohit Bansal accepted that they had 'made mistakes' and they won't draw a salary. Both Rohit and Kunal are taking a 100 per cent salary cut

Nidhi Singh

Former Correspondent, Entrepreneur Asia-Pacific

A self confessed Bollywood Lover, Travel junkie and Food Evangelist.I like travelling and I believe it is very important to take ones mind off the daily monotony .

Growth Strategies

Learn business by doing business across the Globe: The next revolution in Entrepreneurship

As the startup ecosystem sees an influx of new entrepreneurs, the question arises: Is our current business education sufficiently equipping students for the entrepreneurial challenges they will face?

News and Trends

Apple Dethrones Nvidia to Regain Its Position as World's Second Most Valuable Company

Apple has reclaimed its spot as the second most valuable company in the world, overtaking Nvidia, with a market cap of $3.26 trillion.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business Solutions

How to Build Trust and Transparency With Your Customers While Taking Their Data

In this article, we'll explore why businesses must prioritize customer data security and privacy when embracing innovation and provide guidance on navigating the complex landscape to mitigate inherent risks.

News and Trends

Indigrid Technology and Hour4u Raise Early-Stage Funding

Here are the Indian startups that announced early-stage funding rounds.


15 Traits That Set Influential People Apart

Influential leaders spark change for the better.