Layoffs Today, Hiring Tomorrow – A tech paradox unfolds

The Indian corporate landscape in 2025 has transitioned into a curious puzzle. On one hand, companies are making headlines with their declining revenues, razor-thin profits, and the inevitable belt-tightening that translates to minimal appraisals and, for many, the dreaded pink slip.

Yet, in the same breath, these very organisations are painting a rosy picture of the future, promising a hiring spree in the upcoming financial year.

The Appraisal and Layoff Reality

Salary increments in 2025 are projected to be modest, with several reports pegging the average hike below the 9% mark. Deloitte's 'Talent Outlook 2025' even suggests an average of 8.8%, the lowest in a decade, excluding the pandemic years. This cautious approach reflects the muted revenue growth experienced by many companies.

Adding to the gloom, layoffs have been a recurring theme. In 2024, over 1,50,000 employees lost their jobs according to Layoffs.fyi, and this trend has continued into 2025 as well by companies like ShareChat, Pocket FM, Ola Electric, and Zomato. Global tech giants like Google, Microsoft, and Meta have also continued their workforce reductions, impacting their Indian operations as well. The reasons cited for these layoffs range from cost-cutting, restructuring, to the impact of AI and automation.

Hope on the Horizon: The Hiring Promise for FY26

Despite this backdrop, a number of Indian companies are expressing strong hiring intentions for the financial year 2025-26. The majority of companies reported plans to increase hiring. IT giants like TCS, Infosys, HCLTech, and Wipro are collectively aiming to recruit around 1,00,000 freshers in FY26. Sectors beyond IT, including retail, e-commerce, manufacturing, and renewable energy, are also projecting significant hiring growth.

Decoding the Disconnect

How do we reconcile these seemingly opposing trends? It seems like a strategic recalibration is underway. Companies might be shedding roles that are no longer core or are becoming automated, while simultaneously investing in talent with new-age skills like AI, machine learning, and cybersecurity. The need for digital transformation continues to fuel demand for these specialised skills.

Attrition also plays a role. Even with layoffs, natural employee departures create vacancies that need to be filled. Moreover, the hiring promise could be a proactive move, anticipating future economic recovery and increased demand. The focus is clearly on specific skill sets, with high demand for tech roles and emerging areas like sustainability. Some companies might also be optimising costs by replacing higher-salaried employees with freshers or junior talent.

Morale on the Tightrope amidst increased Uncertainty

The impact of layoffs and minimal appraisals on employee morale is undeniable. Job insecurity can lead to anxiety and disengagement, while feeling undervalued due to low increments can increase turnover. However, companies are increasingly recognising the importance of non-monetary benefits, such as flexible work, learning opportunities, and a positive work culture, to retain talent in a constrained environment.

A Market in Transition

The Indian job market of 2025 has turned out to be a landscape of contradictions. While the immediate reality involves financial constraints and workforce adjustments, the future holds the promise of new opportunities, albeit with a clear emphasis on specific skills. This may not be necessarily a sign of instability, but rather an indication of a market in transition, adapting to global economic shifts and the rapid advancements in technology. The key for both companies and employees lies in navigating this paradox with strategic foresight, adaptability, and a focus on future-ready skills.