IT hiring takes big hit in FY24 as slowdown bites

We can expect the industry to continue to shed excess staff as it right sizes against the lower growth expectations for next year, - Peter Bendor Samuel, CEO, Everest Group, tells Bizz Buzz

Hiring Dry Spell

• India’s top 4 IT firms cut workforce by 38,950 in H1
• Skill-based hiring also remains subdued
• Hiring trend unlikely to improve in 2nd half
• Infy not to go for campus placement in FY24
• IT firms in a wait and watch mode till FY25

Bengaluru: Hiring in the technology sector is likely to continue its dry spell in the next two quarters with little chances of improvement in the ongoing financial year. HR experts are of the opinion that though hiring in some skill sets is still going on, current trend is way below the trends seen in the last two financial years.

“The trend continues to be the same with little changes. Though hiring in those pockets of skills like cloud is going on, it is also subdued. Slowness seen in the last quarter and slow business growth are impacting the overall trend. At this point of time, all clients are in a wait and watch mode,” Supaul Chanda, Global Business Head of talent engineering firm- Otomeyt told Bizz Buzz.

With global enterprises holding back technology spend, most IT firms are facing project ramp downs, leading to loss of projects. This, in turn, is leading to low requirement of engineers in the recent quarters. Top four IT firms - Tata Consultancy Service, Infosys, HCL Tech and Wipro - have cumulatively cut their workforce by about 38,950 employees in the first half of this fiscal.

After a record number of employee addition in FY22, hiring momentum decelerated in FY23. The big four IT firms - TCS, Infosys, HCL Tech and Wipro - hired 66 per cent less employees at 82,679 employees in FY23 as compared to 243,258 employees hired a year ago. From the beginning of current financial year, hiring has almost halted with need-based hiring taking precedence.

Many IT firms have decided to skip the campuses for fresher placement this year. Infosys is one of the major IT firms not to opt for campus hiring this year.

“We have hired around 50,000 freshers last year, based on our demand projections. Now, we have a good bench strength of freshers, who are getting skilled in many emerging technology areas. So, there is not going to be any campus placement this year. We will honour all our campus offers given last year,” Nilanjan Roy of Infosys has said during the announcement of second quarter results.

Most firms have delayed onboarding of freshers to whom they have given offer letters last year. India’s largest IT services firm, TCS has received a notice from Maharashtra’s labour and employment ministry regarding the company’s delay in onboarding lateral recruits, as per reports.

Many industry watchers are of the view that headcount will fall further in the second half of FY24. “We can expect the industry to continue to shed excess staff as it right sizes against the lower growth expectations for next year,” Peter Bendor Samuel, CEO of global consultancy firm, Everest Group, told Bizz Buzz.