Hiring in IT services firm declined in nine out of 10 India companies in the July-September quarter because of spending cuts by Western countries and geopolitical tensions, as reported by Mint on Monday. According to that report, it is the first time the hiring in IT sector has dropped over 25 years. Recruitments in the India IT sector is considered to be key growth in the country's economy.
According to Mint, the fiscal year ending on March 31, 2024, likely to become the first time that IT companies end up with fewer staff than at the beginning of the financial year. Workforce in top 10 Indian IT services companies dipped to 2.06 million at the end of the July-September quarter (Q2). These firms used to have 2.11 million employees at the beginning of the quarter.
As per news reports, only L&T Technology Services has seen growth in their headcount. In Q2, the company added 32 employees, thus taking the headcount to an all-time-high of 22,265. While the other major firms, including Tata Consultancy Services, Infosys, HCL, Wipro, Tech Mahindra, and Persistent, witnessed a decline in their employee count.
An executive at Infosys told Mint, "This is not correct that we are not hiring. But we are not hiring in numbers that can offset the number of people who move out of the company as part of natural attrition. So, one can say the workforce could be less (at the end of the year) than what we started with."
Sunil Chemmankotil, chief executive of staffing firm TeamLease Digital, was quoted as saying, "These are testing times for the IT behemoths." He said, "Changing deal types, pressure on margins, and looming uncertainty leave very few options for them when it comes to the talent strategy. It's going to be definitely a lower headcount (at the end of the year) than where we started this year. Maybe, it's time to consider newer talent options like staffing and gigs along with the latest productivity-increasing technologies.”
The total job losses in Indian IT firms come up to 51,744. Several companies have also cut their revenue projection for the upcoming quarters following the Q2 results.