tech layoffs: Tech firing may be to reduce location headcount; global captive houses coming up again: Vijay Sivaram, Quess


“The decision to lay off technical staff is not always about cutting headcount, it can be about cutting headcount in high-cost locations. The global captive sector is also growing – on average a year per month – and we are again seeing captive houses around the world.” vijay shivaramCEO, Quess IT Staffing

“Perhaps somewhere there is less work and I am guessing that it is being replaced in India because of the cost advantage and added value. We have talent,” Sivaram says.

Why downsizing, why downsizing? Part of it seems to lie in the fact that tech companies hired very aggressively in anticipation of post-pandemic growth, but now the band is too strong. Is it a fair assessment?

Several things have happened, one, as you said, last year saw a surge in employment across the globe. I purchased an employee at a much higher cost than I had assumed.

Second, many very new large scale projects are also being hatched as they focus on building more product lines and more remote streams. Projects were started and people were hired for them, but many of these projects didn’t work either. A good percentage of the layoffs we’ve seen are for projects that have started recently but haven’t really gotten off the ground.

Third, people are returning to stores and malls and are ordering less online. So many e-commerce ecosystems, including many startup ecosystems, are bearing the brunt in terms of demand, further hurting gross margins and his EBITDA. So there is pressure to reduce technology costs there too.

Last but not least, heavily funded startups face many tough questions from boards and equity investors. There is also pressure to give back some of the cost-effectiveness to them. It may not be in the form of Amazon, but it faces the ultimate pressure to keep IDC, keep overhead costs stable, and make sure it’s focused on gross margins and revenue lines It’s shaped like some other companies. remains clear.

The story that India is marching on its own is probably very true. After all it is an export oriented sector and depends on how the world works, can you set that in the IT space?
let me break it down for you. Great caution should be exercised when comparing hiring demand to last year’s surge. We need to compare what was pre-pandemic with what was during the post-pandemic surge to arrive at a number and see if it decreased or increased. So be very careful when looking at comparison points here.

Secondly, I think the decision to lay off staff does not necessarily mean cutting headcount, but cutting headcount in high-cost locations. We’re seeing an increase on a base basis over the last two to three years. So we see a global captive house again. My guess is that it’s probably being replaced here because of less work somewhere and cost advantages and added value.

Third, the consumer goods business in India has grown significantly. We continue to see decent hiring demand in retail, consumer goods and other sectors as e-commerce may be a little weaker in terms of hiring. I have a job. I see people flocking to malls and movie theaters. That’s where the Indian story comes in, meaning they’re buying and spending. India weathers the mass storm through changes in consumer behavior taking place on the ground today.

I don’t know if Covid will hit us again. I don’t know what the recession fears will be like. There are deep valleys now and potentially large spikes later. It’s a wait-and-see story.


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