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The cloud over India’s technology sector is darkening with more personnel working for the once-sunrise sector losing more jobs in the first half of this year than those in the corresponding period in 2022, said a report from the Business Standard. Quoting Layoffs.fyi, a website that tracks retrenchment in the technology sector and startups, the report said employers got rid of 10,774 personnel till June 30.

This is a hefty 65% higher than the 6,530 employees who faced job cuts in the first half of last year. However, the rate of rise in technology sector job losses globally has been much higher – 470%.

In fact, this year the job cuts have risen as the year has progressed. The current year began with as many as 2,327 IT personnel losing their jobs. The numbers in the next five months were 2,280 (February), 751 (March), 2,222 (April), 1,706 (May) and 1,488 (June).

City wise, IT capital Bengaluru has borne the brunt with 6,967 layoffs. Mumbai (1,410), Gurugram (1,105) New Delhi (487) and Chennai (400) occupied the next slots in this painful tally.

Since the website deals mostly with startups in India, the figures do not provide a comprehensive picture of the employment conditions. The startup ecosystem has been disturbed by rising interest rates and aversion to risks since many startups prominently feature bleeding bottom lines.

In 2020, the first year of the pandemic in India, 12,932 job losses happened in the technology sector. The next year witnessed an improvement in the numbers when the job losses declined sharply to 4,080 with startups flooding the market. The situation began turning grim in 2022 with the outlook turning even worse in the current year.

Edtech companies laid off the highest number of personnel – 3,610. Other sectors wielding the axe were food (1,915), retail (1,272), healthcare (891), consumer (718), finance (601). Other sectors such as transportation and support services accounted for 1,767 layoffs.

All over the world, there were 213,020 job losses in the technology sector. This is a nearly five-fold increase compared to the job losses in 2022 that numbered around 45,166. Predictably, most of the job losses emanated from the US, which reported 148,491 retrenchments in the first half of 2023. In other words, 70% of the job losses worldwide have taken place in the US this year.

Funding of the startups has declined 72% in the first half of the current year compared to a year ago. Startup data platform Tracxn indicates startups could mop up $5.5 billion in the first six months of 2023, whereas in the first half of 2022, the total amount raised by startups amounted to $19.7 billion. The picture for startups began to get gloomy from the second half of 2022.