Amid the predictions of a global economic slowdown and continued layoffs at software firms, the Indian Institute of Technology Bombay (IITB) is looking at another grim placement season next month.
The premier institute has been able to book only 80% of the number of companies that participated in the placements in the academic year 2022-23, even though there's an increase in the number of graduating students. As a result, IITB is expecting fewer job offers with little change in pay packages offered last year.
The institute points at the downturn in the software industry, which accounts for more than a quarter of jobs and some of the most lucrative international packages offered on campus, as the primary reason for the lack of enthusiasm around the placements, which will begin on December 1.
2.5 lakh tech employees lost jobs
According to Layoffs.fyi, a layoff tracking portal, around 2.5 lakh tech employees lost their jobs at around 1,119 companies in 2023, while 1.6 lakh lost their jobs in the previous year. Global software giants Google, Meta, Amazon and Microsoft are among the companies that have cut a substantial chunk of their workforce this year. The experts have also highlighted the possibility of the global economy slowing down the next year, and even resulting in 'mild recessions' in some countries.
IITB has been facing the impact of the tech slowdown since last year when only 302 out of 1516 (20%) placements were for IT-related roles. By comparison, in 2021-22, 370 out of 1,441 (26%) students were hired for software positions. The proportion of students getting jobs had also dropped from 89% to 82%, as more students had registered for placements.
The limited recruitment by tech companies had an impact on salaries, as fewer students figured in higher salary bands. The institute's placement report shows that while the number of students getting above Rs 16 lakh per annum - the highest salary range - was the same - 563 in 2022-23 and 562 in 2021-22 - there is a significant drop in the number of offers in 13.5 - 16 lakh range from 284 to 229.
The officials are trying to contain the expectations of the participating students according to the realities of the job market. "The students understand the global economic situation. We have been counseling them before the placements and telling them that even if they don't get the desired job on campus, it's not the end of the world. While there's parental pressure, the students also compare themselves with the performance of their peers," said an institute official.
Engineering companies biggest recruiters at IIT Bombay
In order to offset the possible drop in IT hiring, the institute has been trying to get more core engineering companies on board. They are also pushing these firms to offer compensation at par with tech companies. A few of them may also be given coveted slots on the first day of placements. The institute is also banking on start-ups to fill the IT recruitment gap.
"We see that manufacturing is booming, indicating the rising demand for the sector. We have also noted that the number of students opting for higher education has reduced, which means that the graduates are finding jobs. While the initial salaries in core firms are not as high as those in tech, there's a better scope for growth," said the official.
For at least three placement cycles, engineering companies have been the biggest recruiters at IITB, accounting for around 30% of the accepted jobs. Last year, as many as 97 core companies hired 458 candidates from IITB.
IITB pushing companies to opt for the pre-placement offer (PPO)
In order to minimise multiple offers being made to candidates during the placement drive and ensure higher acceptance, IITB has been pushing the companies to opt for the pre-placement offer (PPO) route of hiring. The PPOs are made to the students who intern with the employer for a few months as part of their academic programme.
"There's a higher probability of students accepting PPOs because they have already worked with the firm. Besides, the hiring process for internships is the same as that for placements. We hope that the proportion of PPOs will continue to increase, but it'll be a while before it completely replaces the current hiring process," said an official.
While there's a dip in the number of PPOs from last year's 300, the acceptance rate of these offers is higher - more than 200 students accepting PPOs this year compared to 194 last year.