IT services majors may recruit 40% less in FY24

economictimes.indiatimes.com:

Hiring by India’s top IT exporters is expected to drop by nearly 40% on-year in the current fiscal, underscoring the demand uncertainty and slowdown in technology services that is weighing down the $245-billion industry.IT services majors are estimated to hire between 50,000 to 100,000 employees during fiscal 2024, according to data from staffing firm Xpheno. This will mark a precipitous decline from the net hiring of over 250,000 by these companies in the previous year.

In the first quarter of FY24, India’s top five IT exporters — Tata Consultancy Services, Infosys, HCLTech, Wipro and Tech Mahindra — reported a cumulative dip of 21,838 in net headcount.Also read | Headcount at big 4 Indian IT companies dips in Q1 Industry leader TCS reported a headcount addition of around 500. The remaining four reported a sharp decrease.

Even global IT majors such as Accenture, Capgemini and Cognizant, which have a large base of employees in India, reported a dip in headcount of over 5,000 each during the most recent quarter. “It looks like a washout year for IT services hiring,” said Sunil C, chief executive at TeamLease Digital.

The dismal sentiment is expected to continue, with little or no indication of green shoots in the sector. This, coupled with a lack of visibility on rollout of new projects, is leading to companies withholding fresh mandates for hiring, he added.

“We expect a 40% dip in net hiring by the sector in the current fiscal, as companies are predominantly focusing on increasing employee utilisation metrics,” said Sunil, adding that utilisation peaked in the first quarter. The requirement for new hires is currently down by around 50%, as of August, compared to the previous year.Also read | Future imperfect: how will