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IT giants in India are witnessing a decline in workforce for the fourth consecutive quarter. Can the drop in numbers be considered that a recession is in the offing?
While the general public and outsiders are fearing a recession in the future, industry experts say that the decline could be attributed to a reduction in recruitment at the entry level due to uncertain demand in the major markets.
The IT sector is known to be a major source of employment recruiting lakhs of youth every year. However, the recruitment trends have not been encouraging for the last few years.
According to a specialist staffing firm, the collective headcount of the top eight IT companies decreased by 17,534 in the quarter ending on December 31, compared to the previous three months.
The staff count at Tata Consultancy Services, Infosys, Wipro, HCLTech, LTI Mindtree, L&T Technology Services, Tech Mahindra, and Cognizant’s India declined by 75,000, marking the sharpest fall in at least six years.
IT service giant Infosys’ employee count for FY 2024 also declined by 25,994, for the first time since 2001.
The total employee count for the financial year 2024 was registered at 317,240 and this is 7.5 per cent decrease from the previous year’s statistics.
On a quarterly basis too, Infosys added 5,423 employees less, which is a drop for the fifth consecutive year.
Infosys CFO Jayesh Sanghrajka said their utilisaiton rate has improved from 77 per cent, including trainees in the beginning of the year.
“We have changed our hiring model significantly. We no more hire all the freshers from campus. We hire less than half of them from campus and more than half of them off campus,” he added.
The IT sector which recruits millions of engineers experienced a hike in the hiring around 2021 and early 2022 due to increased demand for digitization and cloud transition globally after the pandemic.
Now, the demand is on the slump as clients in markets like the US and Europe have become more cautious about their expenditure in the wake of high interest rates, inflation and disputes between Israel-Hamas and Russia-Ukraine.
Tags IT Industry
