No jobs for new IITians

On December 9, 2023, Manish Kumar (name changed), a BTech in Electrical Engineering from IIT Delhi, was ecstatic—he had received a Rs 14 lakh per annum offer from a Singapore-based company. It took just five months, however, for his dream to unravel, as the firm rescinded the offer in June with a cursory message—"we are reducing the number of offers to only two from six"—and suggesting that he get back in touch with the institute's placement team.

Much the same nightmare played out for another engineering student from IIT Guwahati, who does not wish to be named. He got a pre-placement offer from the ad tech firm Media.net in December 2023, only to be informed this June that the company has extended his joining date to January 2025 due to "unforeseen circumstances requiring an adjustment of our initial plan", saying, "We will continue to monitor the situation closely and keep you informed of any developments," leaving the joining date open-ended.

A third engineering graduate, this time from IIT (BHU) Varanasi, fared better, in that he got to work as an analytics consultant at EXL. However, the job lasted only a year as he was laid off in June 2023. "I have been unemployed for the past 11 months," he laments.

One has long assumed that a degree from IIT or IIM is a gateway to a secure future. Which is why the fact that companies are either not offering jobs to IITians or revoking them is something students and others are finding hard to reconcile with. "As an IITian, not getting a job is the worst thing I could have ever imagined," laments the IIT (BHU) graduate. Kumar is equally distraught. "The company revoked my offer at the very last moment, leaving me choiceless," he says. Unable to find another job, he finally wrote to Dheeraj Singh, an IIT Kanpur alumnus and founder of Global IIT Alumni Support Group, who is now negotiating with the company on Kumar's behalf.

In fact, it was this alarming trend of rising unemployment among IITians that got Singh to file an RTI (right to information) petition. And it revealed that approximately 38 per cent of IITians, or around 8,000 students across all 23 campuses, are still waiting for job offers. "The number of unplaced students has more than doubled, increasing by 2.3 times over two years, from 3,400 in 2022 to 8,000 in 2024. In percentage terms, unplaced students have grown from 19 per cent in 2022 to 38 per cent in 2024," Singh says.

India's jobless growth has been an open secret for some time now. Data from online portal Naukri.com shows a fall of 17 per cent in job opportunities—from 2.03 million in 2022 to 1.68 million in 2023. Even entry-level jobs for freshers reduced by 13 per cent, dropping from 300,000 to 261,000. That the trend has reached students of premier institutes is worrying, signifying the wider ramifications of the economic slowdown.

What ails job creation? For one, it is an election year for two of the world's largest democracies—the US, where the presidential election is slated for November, and India, which has just concluded its general election. Companies usually avoid expanding or investing in greenfield projects, both crucial for the creation of new jobs and absorption of fresh talent, before a new government comes to power. Only once they know who is taking over do they declare their investment intents and greenlight them, says Aditya Mishra, CEO of HR services firm CIEL HR.

Moreover, many online tech firms, including those in ed-tech, grocery companies, IT and ITeS (IT-enabled services) and GCCs (global capability centres), overhired during 2021 and 2022, anticipating the exponen­tial growth in digital services to continue post Covid. "Not only did the number of new hires grow 2x of a normal year, but those with 4-5 years of exp­erience also landed packages of Rs 20 lakh and above, double the normal," Mishra says.

The tide turned by 2022-2023 as the slowdown in western markets and the Russia-Ukraine war forced companies to reassess and rationalise manpower. Reduced profitability impacted not just hiring in the IT/ITeS sector but also trigge­red layoffs. Thus, overall active job postings related to tech talent—from IT/ITes, tech startups, SaaS (software as a service) companies—and other non-tech sectors fell by 43 per cent in FY24 compa­red to the peak demand in FY22, says Kamal Karanth, co-founder of specialist staffing firm Xpheno.

Of these, the IT/ITeS cohort, a proxy for the employer market and the biggest talent absorber, is down by 41 per cent of the typical annual demand of 280,000-300,000. Of the 300,000 new hires, 80 per cent are freshers, the rest experienced lateral talent. In FY24, the number of entry-level talent addition dropped to 60,000, the lowest in two decades, and even lower than Covid year FY21, adds Karanth. "IT/ITeS firms haven't been to campuses for nearly two years now."

The slowdown is affecting not just those who have yet to land jobs but even those who have found employment. Data from the All India IT & ITeS Emplo­yees' Union (AIITEU) shows that IT/ITeS firms laid off around 20,000 tech professi­onals in 2023. And that, says Saubhik Bhattacharya, general secretary, AIITEU, is an underrepresentation, because IT/ITeS firms, to avoid reporting the layoffs to the Labour Department, often ask employees to resign voluntarily or face termination. Most employees opt for voluntary resignation to protect future job prospects.

Those who leave in the hope of better prospects also often find themselves out of the frying pan into the fire. IIT Bombay graduate Aditya Rajan (name changed) quit Wipro in 2021 after working for 1.2 years as a project engineer because he found the role unfulfilling. He has been unable to find a suitable job and has been working at his senior's startup since October 2022 for a token pay of Rs 3.6 lakh per annum, a significant drop from his earlier package of Rs 13.2 lakh.

"The hiring of top talent is down by 20-30 per cent, and for students, by 40 per cent," says Pasupathi Sankaran, COO of the AI-based recruitment platform HirePro. For mid-level colleges and management schools, which companies usually tap for bulk hiring, picking up 25,000-30,000 rec­ruits, the number has plummeted to 10,000-odd.

Amit Karna, professor of Strategy at the IIM Ahmedabad, says that while they managed to place all their students, the number of offers saw a 10-20 per cent drop. "Students might not have received the variety of job offers their seniors did a couple of years ago," he explains.

Victim of Their Own Aspirations

Recruiters attribute the 'joblessness' among IITians to also the high expectations. They are often unwilling to compromise on the company's brand or settle for low-paying jobs. A Delhi-based IIT student, speaking on condition of anonymity, says, "I received a job offer from a global manufacturing company, but the pay scale was low. I prefer to wait for the market to improve than be benchmarked against a low package." A founder of a five-year-old tech startup says he had reached out to a few final-year IIT students with job offers in product management, software development, DevOps Engineer and Business Development. "However, to my surprise," he says, "the students showed little interest. They were bent on the big brands and fat pay packages that seem unlikely in a downturn year."

Then there is the hierarchy within the IITs themselves. Electrical and computer science engineering students are considered top talent and hired by global technology firms or investment banks like Microsoft and Goldman Sachs. Students from mechanical, textile and civil engineering often switch streams and take up operational roles in business development, strategy, consulting and supply chain at global consulting firms or FMCG/retail brands. "This situation highlights a mismatch in the job market, particularly affecting non-cream branches like civil, biotech, production engineering where graduates don't take jobs in their core fields due to unattractive salaries in their specialisations," says Sankaran.

The Larger Issue

While the downturn for India's top-tier talent may eventually pass, thanks to a dynamic market and growth in sectors incentivised through PLI and domestic demand, the broader unemployment challenge for the country's 46.5 million-strong workforce remains. According to the Periodic Labour Force Survey 2022-2023, only 21 per cent of the workers in the country are engaged in regular jobs, others are either self-employed (57 per cent) or engaged in casual labour (22 per cent). "The challenge of providing meaningful livelihoods to the rest is truly massive," writes Dr Sanjiv Phansalkar, programme leader at the Sir Dorabji Tata Trust, in State of India's Livelihoods Report, 2023.

"Worse, since the disbanding of the Planning Commission, there is no data on jobs created by the private sector or on labour elasticity in the manufacturing sector," says Sunil Kumar Sinha, senior director of India Ratings & Research, a Fitch Group Company. "Even as an economist, I have to base my observations on presumptions rather than scientifically calculated estimations of the labour market."

What is the way out? According to Bhaskar Chakravorti, dean of Global Business at The Fletcher School, Tufts University, "The most significant way to absorb the workforce is through manufacturing. The problem is, India is late to the game. Most manufacturing still happens in China, Mexico and Bangladesh. We have to see if the entry of companies like Apple and Micron can attract other companies as part of the China Plus One strategy."

India has long touted its dem­ographic dividend. It cannot afford to waste it.

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