Silent firing occurring at IT cos

Unlike their global peers, Indian IT firms are not saying that they will reduce the headcount. But, the excess employees are being laid off quietly. This number is not large in number and not a prevalent practice now - a top executive of a Bengaluru-headquartered staffing firm, tells Bizz Buzz

Techies In Cautious Mode

• Headcount to drop further in third quarter for IT firms
• Silent firing happening in many IT firms to reduce headcount
• Backfilling of vacant positions not happening except for critical positions
• Engineering colleges witnessing over 50% drop in placements this season

Bengaluru: Most Indian IT services companies are likely to reduce their headcount further in the third quarter ending December as quiet firing and lack of backfilling continue in the domestic IT industry. Sources in the know said that silent firing is happening in IT companies though it is not a prevalent phenomenon yet.

“Unlike their global peers, Indian IT firms are not saying that they will reduce the headcount. But, the excess employees are being laid off quietly. This number is not large in number and not a prevalent practice now,” said a top executive of a Bengaluru-headquartered staffing firm, whose firm works with several domestic technology firms in hiring space.

In the second quarter, large and mid-tier IT firms reported drop in their total headcount number. Infosys saw it headcount shrinking by 7,530 in Q2 at 328,764, which is third consecutive quarter of decline for the company.

Employee count of Tata Consultancy Services (TCS) remained subdued as the company saw fall in headcount by 6,333 to 608,985 employees by the end of September quarter. Similarly, Wipro’s headcount dropped by 5,015 to take its total headcount to 2,44,707. This was the consecutive fourth quarter when headcount of the Bengaluru-headquartered IT firm had declined.

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. Meanwhile attrition has come down significantly as employee become cautious in changing jobs amid a tough demand environment.

“There is no improvement in the hiring scenario. As it is a traditionally weak quarter due to many holidays, we don’t see any improvement till the next year,” said the person. Also, the trend of not backfilling the vacant positions continue so far in the third quarter. Meanwhile, engineering colleges are facing the heat owing to slowdown in technology talent hiring.

Private engineering institutes are witnessing 50-70 per cent drop in the current placement season starting August-September owing to slowdown in hiring by IT firms.

Apart from IT and computer science streams; automobile, aeronautics, biotechnology, biomedical science, electronics and communications, and electronics instrumentation and control have also been witnessing low demand this time around.

Many reports suggest that long-lines are seen at recruitment centres conducting walk-ins in several cities. Many freshers, who have given offer letters last year, are also waiting for joining dates from their employers.