According to a recruitment body, approximately 60,000 contract workers outsourced in India’s information technology (IT) sector lost their jobs in the year ending in March. The decline in job opportunities for flexi workers hired through contractors by companies was about 7.7% compared to the previous year.
Lohit Bhatia, the president of the Indian Staffing Federation, which represents more than 120 recruitment agencies in the country, noted that this reduction in IT employment growth reflected the global slowdown in IT hiring. However, Bhatia mentioned that the manufacturing, logistics, and retail sectors continued to experience strong hiring, thanks to domestic consumer demand.
The IT sector, valued at $194 billion, played a vital role in facilitating the adoption of online shopping and remote working practices during the pandemic. However, it is currently facing a slowdown as employees are returning to physical offices and the Russia-Ukraine conflict is impacting spending from European clients. Analysts from JP Morgan recently warned that rising inflation, supply chain challenges, and the effects of the Ukraine war would bring an end to the growth boom that India’s IT services experienced during the pandemic.
Bhatia stated that the hiring of flexi workers in the IT sector decreased by 6% quarter-on-quarter during the March quarter. He also mentioned that the hiring of contract workers through third-party vendors may remain weak in the software industry for the next few quarters. Furthermore, India’s unemployment rate in April increased for the fourth consecutive month to 8.11%, as reported by the Centre for Monitoring Indian Economy (CMIE), a think tank based in Mumbai.
The Federation revealed that the overall demand for flexi workers had also slowed down in other sectors. In the financial year 2022-23, around 177,000 jobs were created through vendors, compared to 230,000 jobs in the previous year. The total number of flexi workers hired through vendors in Indian companies has reached 1.4 million, with approximately one-fourth of them being women.