Skill Gap the Underrated Villain of Pink Slip Saga, Say Industry Experts

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A few months into 2023 and the year is already proving to be a rough one for those who work in the tech industry, with tens of thousands of job losses announced by the sector’s biggest players already.

The IT industry has laid off employees citing over-hiring, funding challenges and cost pressures. However, a factor that is playing a big role in this drama is skill gap.

Generally, layoffs are not carried out at entry-level because from the cost perspective companies try to get rid of the middle management who are getting paid a massive amount. But according to some experts, skills play a role when a company decides to lay off a chunk of its employees.

Experts say that while skills may not be the key reason to launch layoffs, it does become an important factor in decision-making.

Employability Gap

‘Employability gap’ has become a recent buzzword in the IT industry with many deeming that the educational system does not place a premium on developing strong foundational and professional skills.

Diving deep into these claims, Soham Thacker, CEO & Founder of Gamerji, told News18 that the problem is that Indian colleges focus on an academic curriculum.

“The IT sector evolves and grows so fast that the curriculum cannot match up to the speed. For example, today we are looking at certain coding languages and then tomorrow things will change. We don’t talk about who knows Java and C++ anymore.”

Though people’s analytic thinking or basic technical skill set might be good enough, the world out there has moved beyond the academic curriculum and that’s when a company must spend a lot of time and resources to train recruits, he said.

“So what began to happen is those who have acquired this real-time knowledge have turned into expensive resources and that eventually leads to layoffs,” said Thacker.

However, he believes that it’s important for the government and the private sector to integrate with colleges so the latter can keep up with the speed of what is going on in the market.

Pankit Desai, CEO and co-founder of Sequretek, echoed similar concerns and pointed out several issues like mediocre teaching staff in engineering colleges and an out-of-date education system.

“There needs to be an overhaul if you want to create a set of skilled students who not only understand the domain but also something that the industry is looking for.”

Talking about the skill gap, Desai said: “IT companies that keep complaining about lack of talent understand what they need. So, the industry has to step up. It can set up an organization that can create good teaching staff, professors, researchers and thinkers who may after 10- 20 years jump out and start their own set of universities that will help the next generation.”

“We haven’t seen corporate India get involved in the education space the way I would like to see. We need them not only to contribute with money but with industry partnership forums, teaching curriculums, give more internship opportunities to students, basically create a whole process,” he added.

Continuous Layoffs

While skill gaps and performance may have been playing a part in the layoffs, Amit Vasistha, founder and CEO of GALF, says recent events have shown that layoffs can result from the financial health of the company, industry demand-supply, external economic conditions and even the political landscape.

“The recent surge in layoffs is not a one-off event and will continue in the future as companies face increasing costs, automation, and return on investment pressures, making it difficult for many companies to stay afloat.”

“Providing competitive pricing to customers while maintaining a good ROI on shareholder capital is making layoffs and digitization a necessary act,” he said.

Vikas Kakkar, founder of, believes that while skill gaps may be a factor, there are several other reasons behind layoffs. But according to him, having the necessary skills is critical for employees to remain competitive in the job market and avoid layoffs.

“Workers must constantly update their skills to remain valuable to their employers as industries evolve and technology advances. This is why, in today’s job market, investing in education and training programmes is critical for both employers and employees to remain relevant and competitive,” he added.

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