IT hiring binge losing steam?
HR experts say there was a significant drop in hiring activity during June
image for illustrative purpose
Bengaluru: After creating nearly five lakh new jobs in FY22, Indian IT industry may not be able to repeat the same feat in the current financial year as hiring in June has fallen. The hiring drop gives early indication of slowdown in headcount additions in the IT sector, which may lead to some moderation in the high attrition numbers, HR experts said.
"We have witnessed drop in hiring activity in June. The rate of backfilling of candidates has gone down. As startups continue laying off employees, sentiment in the job market has changed from growth to stability now among the techies," said a HR expert whose firm works with many leading IT firms in India.
Some estimates suggest that job openings for professionals advertised on LinkedIn platform has dropped to 300,000 in June from 330,000 in May 2022. Leading such fall in openings is the startup sector, which has seen laying off employees in the first quarter of this fiscal year.
About 12,000 staffers of Indian startups have lost their jobs in April-June quarter. Companies including Ola, Blinkit, Byju's (White Hat Jr, Toppr), Unacademy, Vedantu, Cars24, Mobile Premier League (MPL), Lido Learning, Mfine, Trell, and many more have fired their employees during this period.
Amid a funding winter, this trend is likely to aggravate further in coming months. Not only startups, even global firms including Netflix, Tesla, brokerage firm Robinhood have reduced their workforce, while social media giant Meta has slashed its hiring plan for this year. Similarly, crypto-related enterprises have also reduced their employee base in recent months.
Such reduction in techies hiring across the globe, especially in India, is creating some breathing space for Indian IT firms, which are reeling under high attrition numbers for the last one-and-a-half years. Most large firms and mid-tier IT services firms reported an attrition of more than 20 per cent in the fourth quarter of FY22.
However, recent Accenture's results, which is seen as a proxy to Indian IT firms, reflected those net additions may come down in coming months.
"In our view, the deteriorating macro is beginning to show up in some metrics. The net hiring number at around 12,000 is the lowest one has seen in the recent quarters (last 5 quarters' average is about 37,000)," analysts at Nirmal Bang Institutional Equities, said in a report. This tends to be a lead indicator, especially for a company where utilisation levels have been high, it added.
As market leader Tata Consultancy Services (TCS) is all set to kickstart the earnings season from July 8, attrition numbers and net additions will be keenly watched to gauge the demand trend.
