Low hiring sentiment haunts staffing firms
During the 3rd quarter ended in December, most IT firms saw a dip in their total headcount
image for illustrative purpose
Bengaluru: Staffing firms are in a wait and watch mode with regard to hiring in technology sector as they don’t see any visible signs of improvement as of now.
Top officials of HR firms are projecting very less uptick in the January-March quarter of 2024 as clients are not delaying the process of budget allocation.
“We are in a wait and watch mode as there are no signs of any improvement till now. Though hiring by the GCCs (Global Capability Centres) is going on, we don’t see much change in the January-March quarter in the technology sector. Similar is the case for technology startups as of now,” Supaul Chanda, Global Business Head of talent engineering firm- Otomeyt told the Bizz Buzz.
In the quarter ended December, most IT firms saw a dip in their total headcount. Market leader Tata Consultancy Services saw its total headcount falling by 5,600 to 603,305 employees during the third quarter. Similarly, the overall headcount of Infosys fell by 6,101 to 322,663 by the end of December quarter. Wipro’s headcount declined for the fifth consecutive quarter, as total employee count fell by 4,473 to 240,234 during this period.
Not only large firms, but also mid-tier IT companies have also shed employees in order to protect margin amid a subdued demand environment.
Similar is the case for technology startups, which is showing no signs of improvement after massive layoffs in 2023.
According to reports, ecommerce major Flipkart is letting go off about 1,000 employees, which is around 5 per cent of its workforce as part of its annual restructuring exercise. Fitness unicorn Cult.fit has fired around 120-150 employees in a cost-cutting drive. Similarly, food tech firm, Swiggy is planning to cut 6 per cent of its workforce, around 350-400 employees across teams spanning technology, call centre and corporate roles.
Globally, big Tech giants like Google and Amazon are planning to cut more jobs to reduce costs. Riot Games, Google, Amazon Audible, Amazon Prime Video, Twitch, Discord, Unity Software, Xerox, and Frontdesk are among the tech companies that have announced layoffs in 2024.
Against this backdrop, HR experts opined that improvement in the hiring space is likely in the second half of this year when technology demand is expected to pick up.
“We hope the hiring to pick up towards the second half of 2024 when large IT firms are likely to add some headcount. January-March quarter may not be very different from October-December period as hiring intentions remain low among most IT firms,” said another HR source.
After a sharp drop in business during 2023, staffing firms are looking at some improvement this year owing to the low base of last year.
