Tech layoffs continue; ITC Infotech-Happiest Minds to merge

Happy Tuesday! Tech giants Oracle and Microsoft are planning to restructure their India workforces. This and more in today’s ETtech Morning Dispatch.

Also in the letter:
■ Deeptech’s funding gap
■ Semicon 2.0 takes shape
■ Qcomm gains GMV, user share

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Oracle trims 3,000 India roles; Microsoft places 500 on PIP

Tech giant Microsoft and Oracle are rejigging workforces in India and allocating budgets to newer business segments.

Driving the news: Pareekh Jain, chief executive of market research firm EIIRTrend said Microsoft has placed 500 people in the country on performance improvement plans (PIPs).

• Oracle plans to lay off 2,000-3,000 people. The company had laid off about 12,000 people in an earlier round of layoffs.
• Around 2% of Microsoft India workforce, which translates to about 400-500 people, may be impacted by a global PIP exercise at the company.

Company stance: A Microsoft spokesperson said the company has formal performance improvement plan and global voluntary separation agreement processes. Employees who do not meet role expectations can be subject to coaching, a PIP, voluntary separation, or termination.

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Exclusive: Zomato to lay off 250 people as it shuts Hyderabad customer support centre

Food delivery platform Zomato is shutting down its customer support operations in Hyderabad, which will affect around 250 employees, people aware of the matter told us.

Why the move?

• Zomato has been changing its customer support model over the past six months, outsourcing more work to external partners.
• It is consolidating in-house support operations at its Gurugram headquarters, closer to its product, technology, analytics, and business teams.

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ITC Infotech to acquire 22.1% stake in Happiest Minds for Rs 1,330 crore; firms to merge

Ashok Soota, founder, Happiest Minds Technologies

ITC Infotech, a wholly-owned subsidiary of diversified conglomerate ITC, will acquire a 22.1% stake in IT firm Happiest Minds Technologies for about Rs 1,330 crore, as part of a strategic deal to merge the two companies.

ET had first reported on March 20 about ITC Infotech potentially looking to pick a stake in Happiest Minds. On August 29, ET reported details of the proposed transaction.

Deal details: As per an exchange filing:

• In the first phase of the transaction, ITC Infotech will acquire a 22.1% stake in Happiest Minds from founder and promoter Ashok Soota for Rs 1,330 crore across two tranches.
• This will be followed by a share swap between the two entities.
• Under the swap, for every 81 shares of Happiest Minds held, shareholders will receive 25 shares of ITC Infotech.
• Once the merger is complete, ITC Infotech will be listed on the exchanges through the backdoor route.

Tell me more: Post-amalgamation, ITC Limited will hold a 73.4% stake in the merged entity, while Happiest Minds' shareholders will hold the remaining 26.6%.

For the transaction, Happiest Minds is being ascribed an equity value of Rs 6,167 crore, while ITC Infotech has been valued at Rs 11,920 crore, putting the combined valuation of the two companies at more than Rs 18,000 crore.

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WestBridge books 2.6x return on Rs 130-crore partial PhysicsWallah exit

Prateek Maheshwari and Alakh Pandey, founders, PhysicsWallah

WestBridge Capital has offloaded PhysicsWallah shares worth about Rs 120-130 crore since the six-month lock-in for pre-IPO investors expired in May.

What’s happening:

• The VC firm continues to hold stock worth about Rs 2,200-2,300 crore.
• This takes the investor’s overall return on the edtech firm to around 2.6 times.
• The investor began cutting its stake as PhysicsWallah’s stock recovered from its post-listing lows. It is likely to continue trimming its stake in the current quarter, sources told us.

Investment journey: WestBridge invested about Rs 920 crore in PhysicsWallah between 2022 and early 2025 through various fund vehicles, according to ET calculations based on the company’s prospectus.

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Deeptech boom leaves most lab-stage startups stranded

Interest and government support for the deeptech sector in India may be surging, but according to data, private capital remains scarce for startups at the earliest stage of development.

Data decoded: A survey by the Indian Venture and Alternate Capital Association showed:

• Only 15% of deeptech funds back companies at technology readiness levels (TRLs) 1-3, when their technologies are still in basic research and proof-of-concept stages.
• About 60% of the 52 funds surveyed invest at TRL 4-6, when technologies move into demonstration and validation.
• 69% invest at TRL 7-9, when they are deployed and commercialised.

‘Valley of death’: For startups still in the lab, this creates a “valley of death”, where they are often too early for commercial venture capital but too far for most government grants, making it difficult to secure their first institutional cheque.

Sectors like biotech are especially hurt, where companies can spend years on expensive research and validation before they have a commercially viable product.

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Other Top Stories By Our Reporters

Semicon 2.0 takes shape: The government on Monday notified the Rs 1.27-lakh-crore Semicon 2.0 programme, spelling out eligibility and incentives across the semiconductor value chain, including 40 per cent fiscal support for silicon wafer fabs with a minimum investment of Rs 20,000 crore, and sweeteners for chip design.

Quick commerce gains GMV, user share: The market share of quick commerce platforms in terms of GMV (gross merchandise value) has grown from 3% in 2019 to 11% in 2025, per a Goldman Sachs report. Flipkart and Amazon’s combined share of India’s ecommerce GMV has slipped from 73% in 2019 to 62% in 2025, with quick commerce apps emerging as a growing challenger.

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Global Picks We Are Reading

■ China’s CXMT makes breakthrough in advanced memory chips (The Information)

■ Meta’s $18 billion settlement shows the wrong way to keep kids safe (FT)

■ I went to China to see a different AI future. It looked familiar (Rest of World)