Attrition falls in IT Inc.

livemint.com:

NEW DELHI, MUMBAI : Tata Consultancy Services (TCS) Ltd and Infosys Ltd on Thursday reported their lowest attrition in more than two and three years, respectively, indicating a muted job market in the growing shadow of artificial intelligence (AI). In the December quarter, Infosys’s attrition rate at 12.9% was the lowest in 12 quarters, while TCS’s at 13.3% was the lowest in nine quarters. Their highest rates were 28.4% (Q1FY23) and 21.5% (Q2FY23) respectively.

“Open positions in the IT sector have dwindled and candidates are circumspect to change jobs as the impact of AI is not clear yet. Recruitments in IT services are now largely replacement hiring," said Sunil Chemmankotil, chief executive of TeamLease Digital. The trend is in stark contrast to the 20-30% attrition seen just after the first year of the pandemic, when the IT industry recruited in large numbers, sometimes even offering to double salaries.

The job market has taken a complete U-turn since then. “Attrition is trending down and at 13.3%, is now in our range of comfort. We are committed to hiring from college campuses and growing talent organically," said Milind Lakkad, chief HR officer of TCS.

While TCS said it has started campus hiring from the batch of 2024, Infosys had earlier said it will not conduct campus recruitments this year. A similar drop in attrition is expected at Wipro and HCL Tech as well, which release their earnings on Friday. In the fiscal year so far, Infosys saw a net loss of over 20,000 employees, while TCS had a net loss of 11,490 employees.

In the December quarter alone, a net 5,680 employees left TCS and 6,101 left Infosys. Exits were even higher in the September quarter. “The results suggest another tougher quarter ahead for talent