Rest of the Year Will Be Eventful But Still Profitable for Equities: Nomura
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CNBC
9 minutes ago
- CNBC
India's IT layoffs spark fears that AI is hurting jobs in a sector critical to its economy
India's IT sector is facing job cuts, and analysts are wary about what the impact of artificial intelligence might mean for an industry critical to the country's broader economy. The country's largest private sector employer, Tata Consultancy Services, which employs over half a million IT workers, announced last month that it would cut more than 12,000 jobs from mostly the middle and senior management levels, equating to 2% of its global workforce — in what will be its biggest layoff so far. The company's CEO and managing director K Krithivasan attributed the move to "limited deployment opportunities and skill-mismatch" rather than AI. But that did not quell growing unease within the country, as many viewed the layoffs as a sign of broader and disruptive changes underway in the IT sector, amplified by the growing influence of AI. TCS and its peers have long relied on India's vast pool of low-cost, skilled labor to produce software services, a model now coming under pressure as AI is set to automate repetitive tasks and as global clients demand higher levels of innovation. The IT sector has long been highly sought after among India's large pool of engineering graduates, meaning any slowdown will have ripple effects across the economy. India produces over 1.5 million engineering graduates annually, according to local media reports. The sector contributed roughly 7.5% to India's gross domestic product in fiscal year 2023. "AI adoption is a major challenge for India. Entry level routine jobs are being displaced, and mid-level jobs are transforming," said Sonal Varma, chief economist of India and Asia ex-Japan at Nomura. "This creates the challenge for job creation for India, since the country needs to create about 8 [million] jobs annually," she added. Recent earnings also painted a sobering picture of the sector's performance, with IT majors such as TCS, Infosys and Wipro reporting muted year-on-year growth. Although that was largely attributed to uncertainty around U.S. tariffs, which weighed on American clients' budgeting confidence, the recent signs of slowdown in India's IT sector may be merely a "cyclical change," as services exports to the U.S. have eased, said Dhiraj Nim, economist and foreign exchange strategist at ANZ Research. AI, however, will be "a trend to reckon with in the years to come," Nim added. New Delhi has been striving to incentivize growth in labor-intensive manufacturing sectors such as electronics, textiles, footwear and toys as part of its supply chain relocation strategy. The layoffs also add to an already strained labor market as the country's unemployment rate continued to rise. India's urban unemployment rate rose to 7.1% in June from 6.9% in May and 6.5% in April. The youth unemployment rate in urban areas, among those aged 15 to 29 years, also spiked to nearly 19% from 17.9% in May, and 17.2% in April, according to the statistics ministry. The labor market problem could persist for a few years, said Anubhuti Sahay, head of South Asia economic research at Standard Chartered, urging New Delhi to ramp up efforts in creating more salaried jobs. She pointed out that the bulk of job creation has so far come from self-employed sectors where wages tend to remain lower than in salaried ones. Economists have urged New Delhi to accelerate its efforts in upskilling its labor force and bridge the skill gap to lower the risk of job displacement. One in five young adults in India have participated in an AI-skilling program, according to a report supported by and Asian Development Bank. AI will replace some jobs but also transform the nature of existing jobs through "constant skilling," Nomura's Varma said. The government has rolled out an internship program aimed up skilling younger adults with actual working experience. Nim acknowledged that AI could be a threat to jobs, but suggested that whether it will lead to increasing job displacement will depend on skilling and labor movement up the skill chain. New Delhi also must pivot to higher value-added services and innovation rather than focusing on low-end routine work, economists said. "If the economy is unable to adapt, this could lead to job losses, lower services exports, moderate urban consumption," said Varma, with ripple effects across real estate, retail and ancillary services. "It could risk India getting stuck in the middle-income trap," Varma added.
Yahoo
36 minutes ago
- Yahoo
BTS Group AB (publ) announces earnings update for the second quarter and lowered outlook for 2025
P R E S S R E L E A S E Stockholm, August 4, 2025 BTS Group AB (publ) announces earnings update for the second quarter and lowered outlook for 2025 STOCKHOLM, SWEDEN - BTS Group AB (publ), a leading global consultancy specializing in strategy execution, change, and people development, today announces an earnings update for the second quarter 2025. The company is expected to report net sales of approximately SEK 720 (730) and an EBITA of SEK 85 (110) in the second quarter. As a consequence, the outlook for 2025 has changed from a better EBITA than last year to the company anticipating a worse EBITA than last year. The deviation in profit stems entirely from BTS North America, which is experiencing negative revenue growth, mainly due to inefficient go-to-market and sales operations. Additionally, the current unfavorable USD exchange rate as well as severance and other one-time costs in the quarter have contributed to the reduced results. A program to get back to growth of revenue and profit in North America has been implemented, with new leadership of BTS North America, a new strategy and organization for marketing and sales. BTS Other Markets, BTS Europe, and the previously acquired executive coaching business of Boda in North America are continuing to show healthy growth of revenues and EBITA. For more information, please contact: Jessica Skon, CEO+1 (415) 203 1760 Michael Wallin, Head of investor 8-587 070 02+46 708-78 80 19About BTS Group AB BTS is a global professional services firm headquartered in Stockholm, Sweden. BTS has about 1,200 professionals in 38 offices located on six continents. BTS competes in both talent and HR consulting as well as the traditional consulting markets. BTS's services support a broad range of client challenges including top-to-bottom and on-demand leadership development, talent selection and readiness, strategy creation andstrategy implementation, as well as culture and broad-scale change. For over 35 years, BTS has been focused on the people-side of change and on powering better performance using proprietary simulation, learning, coaching, and assessment methodologies. We partner with nearly 1,200 organizations, including over 40 of the world's 100 largest global corporations. BTS is a public company listed on the Nasdaq Stockholm exchange and trades under the symbol BTS more information, please visit Earnings update Q2
Bloomberg
39 minutes ago
- Bloomberg
Another Weak Cocoa Crop in West Africa Will Keep Prices High
Much of West Africa, home to the world's top cocoa producers, is heading into another disappointing harvest. Despite better weather than in previous seasons, structural problems — such as aging trees and crop diseases — may continue to limit output and keep prices high. Ivory Coast, the biggest producer, is projected to collect 1.4 million tons during the main crop harvest between October and March, according to an average estimate from eight traders and analysts surveyed by Bloomberg. That's about in line with the expected total for this season's main crop, people familiar with the figures said.
