India's job market is in dire straits; WeWork is filing for bankruptcy; And with Tejas' failure, are nationalistic films losing their appeal?

Market Watch

• Indian equity indices ended the day in the red for the second straight session, with the Sensex down 283.60 points at 63,591.33, and the Nifty down 90.45 points at 18,989.20.
• Barring Healthcare, Oil & Gas and Realty, all other sectoral indices ended in the red, with Auto, Capital Goods, Metal, IT, and Power, down 0.5-1.5% each.

As IT firms cut back on hiring, is the Indian job market in dire straits?

The year ending 31 March 2024 may mark the first instance of Indian IT companies ending the year with fewer employees than they had at the beginning of the year, according to industry executives and staffing firms.

Flashback: Earlier this year, reports mentioned how several Indian IT firms were looking to cut back on hiring , and were even delaying the onboarding of freshers.

• Infosys said it wouldn’t conduct campus hiring , while Accenture said its existing employees wouldn’t get pay hikes this year either.

This was the situation in Hyderabad at a walk-in interview session last week:

In August, Wipro’s walk-in interview session in Kolkata looked like this:

Why is this happening? While the advent of generative AI is one factor that has led to a reduction in hiring, the overall trend is also reflective of the dearth of quality jobs in the country - a situation compounded by subpar degrees doled out en masse by innumerable run-of-the-mill engineering colleges in India.

• The?State of Working India 2023 report showed over 40% of Indian graduates under 25 were unemployed in 2021-22.
• In fact, the share of India’s under-30 youth in the workforce has decreased from 25% in 2016-17 to 17% by the end of the last financial year , while the oldest age category (45 years and older) has increased its share from 37% to 49% in the same period.
• A recent study by talent assessment firm Wheebox found that half of all graduates in India are unemployable in the future - mainly due to “worthless degrees ”.

The problem isn’t limited to Indian universities alone, as Indians graduating from universities in the UK are facing similar issues .

• In China, youth are deliberately failing exams so that they don’t have to enter a hypercompetitive, and constrained job market.

Why this matters: Youth unemployment bodes ill for the future of the world’s most populous country as India may be unable to capitalise on its ‘demographic dividend’, resulting in an economic slowdown.

• It could also have political consequences for the Modi government, with the 2024 general elections around the corner.

Once valued at $47 billion, WeWork to file for bankruptcy

The company is planning to file for bankruptcy as early as next week due to massive debts and significant losses.

• The company's shares fell by 32% after the news of the potential bankruptcy was first reported and overall, they have fallen by approximately 96% this year .
• WeWork's business model, which involves taking long-term leases and renting them short-term, has been a cause for investor scepticism and is a contributing factor to its ongoing losses .

WeWork's bankruptcy filing would signify a stunning reversal of fortune and a blow to the gut for SoftBank, which has invested billions into the company.

• SoftBank began its investments into WeWork at a valuation of $47 billion in 2019, and that is worth near zero now
• In fact, SoftBank's Vision Fund unit, which includes investments in WeWork, Uber, and DoorDash, suffered losses of $32 billion for its fiscal year ended March 31, 2023

Yes, but: While it is struggling globally, WeWork India has a relatively upbeat trajectory and sound performance.?

• WeWork India’s revenue has grown to Rs 135 crore a month, with an expected EBITDA of Rs 375-400 crore for the year and?an EBITDA margin of 20-25%.
• Its occupancy rate is 81% (against the US company’s 69%) while its building margin (a profitability metric) is at 45% (vs 14% in the US and 22% in the UK) — which make India one of WeWork’s top-performing geographies.?
• This success has been driven by a boom in the commercial realty sector, with office space seeing record-high demand from January to June 2023.
• Furthermore, the company focused on unit economics and profitability rather than aggressive expansion, and diversified its operations by offering a range of services like managed offices, day passes, and even renting out spaces for events.

Hi, I’m Gaurav Jeyaraman, the editor of this newsletter. We’d like to hear some feedback on our newsletter: what works and what doesn’t work? WhatsApp me directly and tell me what you think.

With Tejas' failure, are nationalistic films losing their appeal?

Several exhibitors across the country have removed Tejas from theatres because of “zero ticket sales” and because only 4-5 viewers showed up for some shows.

• Kangana Ranaut's film 'Tejas' has largely been rejected by audiences, with an overall box office collection standing at Rs 4.50 crore .
• The film, directed by Sarvesh Mewara, saw no growth since its release on October 27, with just Rs 35 lakh earnings on October 31, and an overall occupancy of 5.80% .
• Despite Kangana urging fans to watch ‘Tejas’ in theatres and not wait for its OTT release, footfalls have been dipping drastically in theatres.
• Despite a special screening for Defence Minister Rajnath Singh and Indian Air Force Officers, the film has shown no improvement in its performance.

The big picture: The runaway successes of other “nationalistic” films like The Kashmir Files, Rocketry: The Nambi Effect, and Uri don’t seem to be replicating this year.

• Shoddy box office performances of The Kerala Files, The Vaccine War, and now Tejas, seem to show that Indian audiences may have lost their appetite for jingoistic narratives.
• The success or failure of upcoming flicks like “Indi(r)a's Emergency” - on Indira Gandhi’s tenure as PM - and “One Nation” or “Ek Rashtra” on the RSS will be something to watch out for.

ICYMI

• BJP's National Convener of the IT cell, Amit Malviya, has suggested a link between George Soros-funded 'Access Now' and the recent iPhone hacking allegations.
• Indian transport company Ola and logistics startup Porter are among the worst platforms for gig workers, scoring zero on a scale of 1 to 10 for fair work standards.
• Uttar Pradesh (UP) has surpassed Karnataka to achieve the highest manufacturing and sales of alcohol in the country .
• AI Modi voiceovers are taking the internet by storm, but could also be a useful tool for political campaigning .
• Yemen's Houthi rebels - known to be funded and supported by Iran - have declared their involvement in the Israel-Hamas conflict .
• Indian companies can now list abroad, with SEBI proposing 10 jurisdictions including the U.S., U.K., France, Germany, Canada, Japan, South Korea, Switzerland, and Hong Kong.