M Rangaswami, well-known enterprise capitalist and entrepreneur, informed PTI that whereas the IT giants like Google and Facebook may need a unique strategy, lots of the startups have been instituting both layoffs or discount in wage or a mix of each.
“They are all making sure that they have enough cash in the company for 18 to 24 months. This is a bad time to raise money. Because if they go try to raise money now, they’ll get very poor valuation,” Rangaswami stated reflecting on the temper amongst startups within the Silicon Valley.
“So, I think over the next month, you’ll hear a lot of unemployment picking up in the Bay Area, which has not happened since 2007, 2008. Even then, it didn’t happen much. But this will be the first time you’ll see that in a long time like after the 2000 bubble. This will equal that type of situation,” he stated.
The Silicon Valley is bracing itself for a layoff within the startup group, he stated, including that that is one thing that the Bay Area has not seen in a very long time. “It’s not like half the Silicon Valley will get laid off. It might impact five per cent of the workforce or 10 per cent of the workforce get laid off. And people might take a 10 per cent salary cut that type of stuff,” he stated.
“It’s not that the sky is falling, but the fact is that it hasn’t happened in a long time,” Rangaswami stated.
Responding to a query, he stated, he can not discuss for the large companies like Google and Facebook.
“They may not do anything. But this is amongst the startup community. Definitely layoffs and reduction in salary,” he stated.
“Big corporations will most likely freeze hiring. That’s what they do as a result of they’ve already received massive companies. They have a variety of money available, and so they can climate the storm. Right. But small corporations, the startups which can be 10-20-50 million is dimension must do cost cutting for certain. And foremost prices slicing in fact, on this enterprise is individuals,” Rangaswami stated.
Companies which can be promoting to journey and tourism industries will see an enormous dip of their enterprise fortunes.
Rangaswami stated the Indian IT professionals on H-1B visas may not see a lot firing as a result of they’re already saving some huge cash for his or her enterprise.
“They are already in jobs where they’re saving customers money. So unless their business declined significantly, these people will still be needed. It’s only if there’s a dramatic downturn of the business. And those H1B workers are in that line of business and they don’t need them anymore, then of course it would make it,” he stated.
“But if it is just general IT projects, they shouldn’t see any of that decline,” he stated.
It will affect the Indian IT corporations like in the event that they’re promoting to journey, tourism, eating places, accommodations. Those promoting to monetary companies may not see any affect, he added.
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