The year 2023 has been marked by disappointments in the job market, with reduced increments, fewer vacancies and rampant layoffs affecting thousands of individuals. As we stand on the brink of 2024, the trend of economic challenges and job market uncertainties seems set to continue.
In a recent development, Paytm, an Indian fintech and payments giant, has made headlines by laying off 1,000 employees. The reason behind this strategic move is to boost efficiency by integrating artificial intelligence (AI) tools to handle repetitive and mundane tasks. According to Paytm, AI has proven to be more effective than human counterparts in certain job functions. This move by Paytm reflects a broader trend seen across industries, where companies are focusing on cutting expenses, maximising savings and doing more with less. The wave of austerity is evident in major global banks including UBS, Credit Suisse, Wells Fargo, Citigroup, Morgan Stanley, Bank of America and Goldman Sachs, which collectively cut 60,000 jobs in 2023.
Challenges in the banking sector
The banking sector, facing difficult times, has witnessed a decline in earnings over the past two years. Investment bankers, in particular, have experienced reduced income due to a decrease in deal-making and public listings. With fewer companies going public and investors opting for safer bets, banks are resorting to laying off employees to protect their profit margins. A recent report highlights the challenges faced by major global banks, emphasizing a trend of plummeting fees and the need for cost-cutting measures to maintain profitability. This transformation is not limited to the banking sector; it extends across various industries and is characterised by a global effort to protect profit margins by reducing headcounts.
Impact on different sectors
The tech sector stands out as one of the hardest-hit industries, with over 4,00,000 employees worldwide losing their jobs. Non-essential goods sellers, such as car companies like Ford and furniture retailers like IKEA, have also faced significant layoffs. Even the healthcare sector has not been spared, with companies slashing over 20 per cent of their staff on average.
In a surprising development, the Big Four accounting firms – Deloitte, EY, KPMG, and Pricewaterhouse Coopers – have collectively let go of over 3,00,000 employees in 2023. This mass exodus is attributed to a changing job market landscape with firms responding to economic slowdown and advancements in technology.
The job market transformation is a result of two key events – the economic slowdown and the rise of new technologies like artificial intelligence. These factors have led to significant changes and churn in the job market leaving fewer opportunities for human employment.
Future of jobs
A survey conducted by the World Economic Forum involving 800 companies across 27 industries and 45 economies reveals a complex picture. While these companies plan to create 69 million new jobs by 2027, they also anticipate eliminating 83 million positions, resulting in a net reduction of 14 million jobs.
As we navigate through 2024, the job market is expected to become more competitive. Companies will prioritise versatile skillsets and individuals are urged to adapt, acquire new skills, and position themselves as valuable assets in the evolving workplace.
Roles in artificial intelligence and machine learning, sustainability, business intelligence analysis, information security analysis and renewable energy engineering are expected to be in high demand. The job market is evolving and individuals with expertise in these areas will be sought after in the changing landscape.
The job market of 2024 is characterised by challenges, transformations and a growing reliance on technology. While the wave of layoffs initiated in 2023 may persist, individuals can navigate these changes by embracing skill development and staying adaptable in the face of evolving job market dynamics.
Hiring intent in India Inc will rise in 2024 but IT jobs to remain scarce: Report
India’s hiring landscape is poised for growth in 2024, with overall intent increasing 19 percent compared to the previous year, according to a report by recruitment platform Taggd.
The manufacturing sector leads the way with a robust hiring intent of 25 percent, underscoring a positive outlook for industrial expansion.
Manufacturing companies plan to hire 15-30 percent more graduates from the 2024 batch than they did from the 2023 batch, indicating a positive trend in the manufacturing sector, the report, titled ‘India Decoding Jobs 2024’ noted. It was launched today at a Confederation of Indian Industry (CII) event. The Banking, Financial Services, and Insurance (BFSI) sector also stands out with a substantial 25 percent hiring intent, indicating a strong focus on talent acquisition in the financial domain.
Similarly, the automotive industry is set to witness a 20 percent surge in hiring intent, reflective of the sector’s anticipation of increased demand. The Internet business and Global In-house Centre sectors share a promising outlook, with a significant hiring intent of 20 percent, highlighting the continued importance of technology and global operations.
Meanwhile, the pharmaceutical industry displays a 16 percent rise in hiring intent, emphasising sustained growth in the healthcare sector.
“In the last 8-10 months, we have absorbed the impact of the global slowdown. Much of it came with the normalisation of hiring in sectors like IT. We do believe that the numbers being predicted in the report are inclusive of all global parameters that we know can impact hiring, at least at this point. The offshoots of the global slowdown do not seem to be significantly affecting hiring in 2024,” Devashish Sharma, CEO at Taggd, told Moneycontrol.
Hiring in IT to remain subdued
The information technology (IT) sector showed a more conservative hiring intent increase of 3 percent, potentially reflecting a nuanced approach amid evolving industry dynamics.
While volume growth in most IT companies has been impacted, salaries for IT employees have increased by approximately 15 percent, offering some support. On the other hand, non-IT hiring is experiencing growth, particularly in smaller towns.
Top IT services firms are projected to hire between 50,000 and 100,000 employees during fiscal year 2024, representing a significant decline from the net hiring of over 250,000 in the previous year.
“If we look at the hiring numbers, they will reach a normalised rate within the next six to nine months. Though the demand may not touch the post-pandemic ramp numbers this year, the demand for tech talent will continue from non-IT sectors, where digital initiatives are bringing up new opportunities,” Sharma said.
Remote work to decline, diverse hiring anticipated
In 2023, the employment landscape witnessed a predominant trend towards hybrid work models, constituting 56 percent of hiring intent, while 37 percent opted for traditional office-based setups, and 7 percent embraced remote work.
A nuanced shift is anticipated in 2024, as the hybrid model strengthens its position at 60 percent, indicating a further embrace of flexible work arrangements.
Work from office-only scenarios is expected to register a decline to 33 percent, reflecting a strategic balance, while the remote work component remains steady at 7 percent. The report said this points towards an evolving approach to work modes, emphasising the adaptability and resilience of organisations in shaping the future of work.
In 2024, the projected diversity percentages for the workforce signify a positive evolution, with an expected increase in female representation to 36 percent, while the male percentage is anticipated to decrease to 64 percent. The current workforce distribution stands at 33 percent females and 67 percent males.