Published: 02nd December 2022
Unemployment rate now at 8%, highest in three months. Mass lay offs, economic slowdown, other causes behind it
Apart from the recent news of lay offs by firms such as Meta, Twitter and Salesforce, hiring has also been put on hold due to the economic slowdown
The country's unemployment rate increased to 8% in November, the highest in three months, as against 7.77% in the previous month, mainly due to a rise in the urban unemployment rate.
According to data from the Centre for Monitoring Indian Economy (CMIE), the urban unemployment rate rose to 8.96% in November from 7.21% in the previous month. The rate of unemployment in rural areas dropped to 7.55% from 8.04% in October. Experts attribute the rise in the unemployment rate to multiple factors including the macro-economic environment. "Companies are going slow, or in a more controlled manner, on the hiring front, due to the headwinds in the global markets. Another important aspect of this reduction in manpower is by start-ups that had contributed to a surge in hiring during the pandemic," Sumit Sarabhai, Business Head, Emerging Vertical, TeamLease Services told The New Indian Express.
These companies had hired because their consumers were utilising their services extensively during lockdowns. But the current back-to-office or "normal" scenario is having a strong recoil effect on their business, resulting in manpower reduction as the COVID-led consumer behaviour wanes, Sarabhai said. He added that the unemployment number is expected to return to the normal range soon. In November alone, many companies including Meta, Twitter, Cisco, HP and Salesforce announced their lay-offs. Apart from start-ups, many firms have announced a pause in hiring due to the economic slowdown.
India's unemployment rate hit a one-year high in August 2022 at 8.28% from 6.83% in the previous month, primarily due to a significant increase in urban unemployment at 9.57%. From 5.84% in September, the unemployment rate in rural areas surged to 8.04% in October and now, the rate has dropped to 7.55%. According to CMIE data, the unemployment rate was the lowest in Chhattisgarh at 0.1%, and it was the highest in Haryana at 30.6%.