Sharpest fall in six years! Headcount at top IT companies like TCS, Infosys and others falls for four quarters; hiring takes a back seat

Feb14,2024



Number of Employees IT FALLS ON THE GIANTS! Top companies in India's information technology sector have experienced a decline in their workforce for the fourth consecutive quarter. This decline can be attributed to a decline in entry-level recruitment and a slow hiring process to compensate for attrition. The uncertain demand environment in their key markets has also played a role in this trend.
The collective number of top eight IT companies There was a decline of 17,534 in the quarter ended December 31 compared to the previous three months. Compared to the same period last year, there has been a decline in the number of employees in these companies, including Tata Consultancy Services. Infosys, Wipro, HCLTech, LTI MindtreeL&T Technology Services, Tech Mahindra and Cognizant's Indian business declined by 75,000, the sharpest. Fall In at least six years.
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Kamal Karanth, co-founder of Xpheno, said the collective headcount of these eight companies has now fallen closer to the level of early 2022. By the end of December, just under 2 million people were employed in these companies.
The IT sector in India, which employs millions of engineers, experienced a surge in hiring around 2021 and early 2022 due to increased demand for digitalization and cloud transition globally following the COVID-19 pandemic. However, demand has now slowed as customers in markets such as the US and Europe have become more cautious about discretionary spending in the wake of concerns over high interest rates, inflation and conflicts such as the Israel-Hamas and Russia-Ukraine disputes.
Given the high hiring in 2021, this slowdown in demand has had a direct impact on hiring and headcount over the past few quarters.
According to data collected by Xpheno, the number of net employees at these companies began to decline in the January-March quarter of 2023, with a decline of 12,455 compared to the previous three months. The number declined by 28,387 in the April-June quarter and by 16,624 in the next three months till September.
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However, experts suggest the tables may soon turn. Recent financial results from various platform vendors and cloud providers have been encouraging, which may lead to increased demand and subsequently more hiring by IT providers. Additionally, there has been an increase in client requests for offshore-focused support for basic roles, resulting in greater demand for entry-level talent.
Yugal Joshi, partner at tech industry research firm Everest Group, said these companies were overly aggressive in their recruitment practices before the demand slowdown. However, some of them are now delaying the induction of graduates whom they had earlier offered to hire during campus placements to protect their margins. In fact, 2022 has hired graduates who have not yet been hired by some of the biggest IT companies.



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