Also in this letter:
■ IT companies face new challenges while hiring candidates
■ Zoho India unit profit rises 43% to Rs 2,748.83 crore
■ ETtech Done Deals
Active IT job vacancies in India plummet 60% in Jan
The number of active job vacancies in India’s IT sector declined by a record 60% year on year this month, data collated from LinkedIn and other popular job boards showed.
By the numbers: The IT and tech sector, a collective of services, products and internet-enabled startups, put out 112,000 active jobs this month, a massive slump from 273,000 open jobs in January 2022 ago and lower than last month’s 124,000 active jobs, per data put together for ET by specialist staffing firm Xpheno.
This has also brought down the tech sector’s contribution to the overall active white-collar jobs in the country to a record low of 40%, down from its previous dominant position of 84% in January 2022.
Reason: Job market experts said tech companies are cautious about adding to their payrolls amid a gloomy global macroeconomic outlook, fears of recession in the West, and demand concerns due to the ongoing uncertainty.
Challenges galore: IT companies continue to grapple with a growing bench size, project delays, slowdown in discretionary spending and high wage cost.
Fall in Indian startup valuations have created an interesting opportunity: Tim Draper
Tim Draper, founder of VC firm Draper Associates and a Silicon Valley investor, believes India has the potential to dominate the fintech, cryptocurrency, blockchain and smart contract markets if it fosters supportive policies, invests in world-class infrastructure and promotes entrepreneurship. Draper, who has invested in companies like Tesla, Baidu, Skype, Robinhood, SpaceX and Coinbase, spoke to ET on the evolution of Indian startups, misgovernance in startups and why Indian regulators should change their views on crypto.
On the state of crypto market: I believe that China, under President Xi, has decided to shut itself off from the world economy, and this presents a huge opportunity for India to position itself as a free and open country. However, if India were to eliminate or regulate cryptocurrencies with a heavy hand, I fear that they would lose a lot of engineers, as they would likely leave to go to the US or Dubai. This would be unfortunate as India is currently a hotspot for engineers. India could absolutely completely grab this entire fintech, cryptocurrency, blockchain and smart contract market.
How have you seen the Indian startup ecosystem evolve?
The entrepreneurial environment in India now seems extraordinary to me. In 2019, I was impressed by the exciting startups I met. But valuations were very high. Now, I believe valuations have come down, creating an interesting investment opportunity.
I think investors for this cycle will probably do well, as the valuations have come down and the opportunities in India are vast and creative, even compared to Silicon Valley. They have gone beyond the “me too” concept and offer unique opportunities.
IT find new ways to spot fraud in virtual interviews
IT companies in India are coming up with innovative means to check fraud by prospective employees during online job interviews, as the virtual mode has become an alternative medium for recruiting post-pandemic.
Background verification firms have already been tasked with conducting pre-onboarding background checks and now are getting additional mandates from companies to streamline the interview processes as well.
Rise in frauds: Major IT firms like Accenture had let go of some employees in India late last year due to the submission of fake documents. Others too have reported a spike in such instances.
Quote, unquote: “Impersonation during a virtual interview has been a new thing. This is when one person attends the interview and a completely different person joins the job. Google searches on the side, getting answers prompted on Bluetooth devices are other ways people have tried to cheat in interviews,” said Ashok Hariharan, founder & CEO of background verification firm IDfy.
Steps companies are taking: Mumbai-based IDfy is using tools like geotagging or verification of addresses digitally, generally latitudinal and longitudinal coordinates, while the candidates are on the video call.
Screenshots, video recordings: Many companies have made it mandatory for the interviewers to keep screenshots and video recordings of virtual interviews to cross-check if there is any cause for concern in the future.
Zoho India unit profit rises 43%
The Indian unit of global business software provider Zoho Corporation reported a 43% increase in yearly consolidated profit, as per the latest financials it filed with the Ministry of Corporate Affairs on Saturday. The company said its total profit attributable to shareholders rose to Rs 2,748.83 crore, in the financial year ended March 2022, from Rs 1,917.72 crore, a year earlier. Total revenue rose about 29% to Rs 6,998.82 crore.
Details: On a standalone basis, the unit booked profits of Rs 2,386 crore in the reported period, on total revenues of Rs 5,309.05 crore. Year-over-year, the standalone figure is a 21% jump in profit, and about 19% up in revenue. Finance costs in the period went up 4X to Rs 10.22 crore, while depreciation and amortization costs were cut by 27% to Rs 277.29 crore.
Snap’s profit from India operations more than doubled in FY22
Snap Camera India, a subsidiary of Snap International II Limited, has recorded a 114% jump in net profit for FY22 to Rs 6.2 crore, according to data sourced by business intelligence platform Tofler. Net profit in the previous fiscal was Rs 2.9 crore.
‘A big success story’: In April 2022, Snap cofounder Evan Spiegel called India a big success story for the company. “Certainly, India has been a great success story for us. But that’s been a big focus of ours, and we have now really organised our teams in our processes around scaling that growth around the world,” Spiegel had told analysts in the US during the Q1 2022 earnings conference call.
The company has also launched a subscription-based service Snapchat+ in India. However, the platform’s subscription revenue in the country is negligible.
Recent appointments: Snap has appointed former Meta India head Ajit Mohan as president of its Asia Pacific operations. It has appointed ad-tech companies Tyroo and Httpool as official advertisement sales partners in India.
ETtech Done Deals
■ Biotech company Enzene Biosciences, a subsidiary of Mumbai-based drug maker Alkem Laboratories, has raised $50 million (or roughly Rs 408 crore) in fresh equity funding from Eight Roads Ventures and healthcare investor F-Prime Capital.
■ Gurgaon-based CapGrid, a B2B cloud manufacturing startup for precision parts and components, has raised $7 million (about Rs 57 crore) in a Series A round led by Nexus Venture Partners.
Razorpay’s forex service to help founders transfer funding to India
Details: Razorpay has set up a team of dedicated experts for the forex service, to help handhold startup founders through the process. According to Razorpay’s chief business officer, Rahul Kothari, the forex offering under the company’s digital banking proposition, Razorpay X, would help startup founders reduce the time taken to bring back their funds to almost 48 hours from up to two months in some cases.
Timing: The launch of the new product comes at a time when RBI stopped Razorpay from onboarding new merchants on its payment gateway product in December last year, and asked it to submit a system audit report as a part of the final authorisation process for its payment-aggregator licence.
Also read: RBI directs Razorpay to pause onboarding new merchants
Other Top Stories By Our Reporters
Data centre firms commit billions in India but view draft bill as huge setback: The draft Digital Personal Data Protection Bill, 2022 has moved away from a rigid data localisation stance to one that allows information to be stored in ‘trusted geographies’. Firms that set up and run data centres are, however, unsure if this would be a good move for investment and expansion.
219 tech firms fire over 68,000 employees in January: The layoff season continued to hit the tech world in 2023 with some big names like Microsoft and Google joining the list. More than 3,400 tech employees are being laid off per day on average in January globally.
Uncertainty, layoff fears raise tech pros’ stress, anxiety levels: At a time when several companies are announcing job cuts, work expectations from the employees, especially those in IT and startup domains, are rising and so are the workload and associated stress and anxiety levels.
List of companies that have announced job cuts in 2023: From startups to companies including Amazon, Microsoft, and Google parent Alphabet, have announced layoffs to cut costs amid a looming global economic downturn. Across the tech sector thousands of jobs were cut to correct the over-hiring of the Covid period. Here is a list of major companies that have announced layoffs so far in 2023.
