The recent wave of job cuts in India’s IT sector is causing concern among consumer-focused companies, who fear it could slow down the already fragile recovery in discretionary spending. Following a major IT firm’s announcement to cut over 12,000 jobs, uncertainty in the sector has deepened. Industry representatives have suggested that more layoffs may follow, which could impact demand across categories such as fashion, electronics and personal care, as people tend to reduce spending and save more during uncertain times.
The tech sector is a key employer of young professionals, especially millennials and Gen Zs, who contribute heavily to household consumption. Although India’s consumption growth is slowly picking up after a period of stagnation, it remains uneven. Some firms have highlighted persistent challenges. One consumer goods company recently referred to “tough” operating conditions in its latest quarterly results.
Economic sentiment and job security are closely tied to consumer spending, said a senior business leader in the jewellery sector. He believes that sustained growth in consumption depends on broader economic stability, though the jewellery segment may feel a lesser impact due to the emotional and investment value Indians place on gold.
Despite a slowdown, the IT industry added around 120,000 jobs last year, according to a sector analyst. However, the hiring outlook for the current financial year appears weak.
India had seen signs of improvement earlier this year with low inflation, reduced interest rates and tax reliefs introduced in April. These factors were expected to boost consumer demand. But the slowdown in tech hiring and rising layoffs are threatening to derail that momentum.
A leader at a fashion brand said that although easing inflation and tax reforms have provided some support, overall retail recovery remains inconsistent. “Job uncertainty in sectors like IT does impact consumption, particularly in categories like fashion,” he stated.
Meanwhile, a personal care brand executive noted that cautious spending is evident among consumers. “The IT layoff trend has created some unease in consumer sentiment,” he said, adding that the upcoming festive season will be the real test for consumer demand recovery.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream formerly known as CIO News LinkedIn Account | The Mainstream formerly known as CIO News Facebook | The Mainstream formerly known as CIO News Youtube | The Mainstream formerly known as CIO News Twitter |The Mainstream formerly known as CIO News Whatsapp Channel | The Mainstream formerly known as CIO News Instagram
About us:
The Mainstream formerly known as CIO News is a premier platform dedicated to delivering latest news, updates, and insights from the tech industry. With its strong foundation of intellectual property and thought leadership, the platform is well-positioned to stay ahead of the curve and lead conversations about how technology shapes our world. From its early days as CIO News to its rebranding as The Mainstream on November 28, 2024, it has been expanding its global reach, targeting key markets in the Middle East & Africa, ASEAN, the USA, and the UK. The Mainstream is a vision to put technology at the center of every conversation, inspiring professionals and organizations to embrace the future of tech.
