Tech layoffs in 2022 have seen 135,000 employees impacted globally, with thousands in India in the potential line of fire.

Due to the severe and uncertain economic crisis, jobs have been snatched from individuals since Covid19 entered our lives with global shutdown. People took their time but with time being the ultimate healer, everyone has found their comfort in freelancing. So, the current hot topic seems to be: is freelancing the solution to mass layoffs?

Reason for Mass Layoffs

The effect of geopolitical ambiguity on the worldwide economy, tied with the ailing markets, extensive inflation along with the fear of a long-lasting universal recession, all of these have capped the brand-new liveliness across the organizations.

Since the majority of businesses have engaged in a firing frenzy, the mass layoffs have terrified ordinary people all over the world. Mass layoffs have been happening all across the world, in both large and small businesses. Many people continue to be confused as to why businesses choose mass layoffs at a time when workers all over the world are afraid of losing their jobs.

The businesses engaging in the mass firing are citing factors including cost-cutting, poor performance, and financial challenges. While huge layoffs have affected practically all industries, the IT sector is the one that is letting go of tens of thousands of workers.

Common Causes of Mass Layoffs

According to the companies' justifications, the 3 most frequent causes of mass layoffs are the pandemic boom, over hiring during the pandemic, and fear of a recession.

• Pandemic Boom: As a result of individuals being in lockdown and spending a lot of time online during the COVID pandemic, demand increased exponentially. Following a rise in overall consumption, the businesses increased their output to keep up with demand from the market.
   
• Over Hiring During the Pandemic: As the global lockdown was released, hiring began to stress businesses. Notably, several software organizations went on a hiring binge to keep up with demand because they believed the boom would last long after the outbreak. Consumption declined as the restrictions were relaxed and more people ventured outside of their houses, which caused these large tech businesses to suffer significant losses. Because of the unexpected increase in demand, some of these resources were engaged at a higher price.
   
• Recession: Several studies have been published recently that predicted a worldwide recession. These businesses are reducing their expenses by terminating underperforming projects and firing the surplus and expensive resources they employed to speed up growth as demand returns to pre-Covid levels, the debt bubble is almost about to burst, and they fear a recession. According to Business Insider, CEOs anticipate economic uncertainty and a recession in 2023.
   

As of December 8, 2022, a total of 17,989 employees were asked to leave by 52 Indian startups, including a host of unicorns such as BYJU’S, ChargeBee, Cars24, LEAD, Ola, Meesho, MPL, Innovaccer, Udaan, Unacademy and Vedantu, besides the listed foodtech Zomato.