The Indian IT sector witnesses its first hiring slump in 25 years
30 Oct 2023
With the rise in geopolitical tensions and spending cuts by western countries, there has been a decline in hiring at most Indian IT companies. For the first time in 25 years, hiring in the IT sector, a sector that is considered to be key to a country’s economic growth, has declined.
There is a good chance that on 31 March, 2024, IT firms will have fewer employees than at the beginning of the financial year. This would be an unprecedented event if it occurred. The top 10 IT companies in India saw a fall in their workforce to 2.06 million at the end of the July–September quarter. At the beginning of the quarter, the workforce in these companies amounted to 2.11 million.
L&T Technology Services is the only IT company that saw growth in its headcount. Other IT sector companies, including Tata Consultancy Services (TCS), HCL, Wipro, Infosys, Tech Mahindra, and Persistent, saw an overall fall in their workforce. The total number of job losses amounted to 51,744.
An executive at Infosys clarified that the company is indeed hiring. However, the number of new hires is not sufficient to counterbalance the natural attrition as employees leave the company. This could result in a smaller workforce at the end of the year compared to the initial headcount.
Sunil Chemmankotil, chief executive of staffing firm TeamLease Digital, has exclaimed that IT giants are facing some testing times.
In light of changing deal types, margin constraints, and growing uncertainty, an IT firm’s talent strategy is limited in terms of choices. It's almost certain that the headcount will be lower at the end of the year compared to the beginning of the year. Perhaps it's time to explore alternative talent solutions such as staffing, gig work, and the latest productivity-enhancing technologies, as suggested by Chemmankotil.
Most IT firms have also decided to cut their revenue projections for the next quarter.