Last week an appeal purportedly issued by Birla Institute of Technology & Science (BITS), Pilani, to its alumni, seeking their help in the placement of its current students went viral on social media. The appeal mentioned that the global economy may be experiencing its worst slump in decades, with around 4 lac employees being laid off since January 2022. The cost-cutting measures taken by the small and large businesses have resulted in hiring restrictions (including at the campus level) and a funding winter. It added, that the hiring slowdown has deepened in recent months. Some other top-level higher education institutions have also reported challenges in campus placements.
As per a Mint report, the total headcount of the top five IT
services firms in India has fallen by ~65000 during the year 2023. About five
million aspirants applied for 60000 police constable posts in UP. The applicants'
ordeal in traveling to the examination center and then returning disappointed
due to paper-leak was also discussed widely on social media. In a seemingly
unrelated occurrence, the market capitalization of the US tech company reached
close to USD2trn, about half of India’s GDP. The stock price of the company has
risen ~20x in the past five years.
In my discussions with friends on this aspect of the economy, the three most common suspicions were:
(a) If the condition of the economy is so bad, why are the equity markets booming?
(b) If the job crisis is so severe, why is the incumbent government so popular, especially among the youth?
(c) The development of Artificial Intelligence (AI) is still in the early stages. How many more job losses shall we witness in the coming years due to automation?
I will be happy to hear readers’ views on this cognitive dissonance; before I share my random thoughts tomorrow.
