Indian IT Giants: Massive Brake On Hiring Now
In a surprising shift from previous years’ exuberance, Indian IT giants are tapping the brakes on their hiring spree, responding to client cutbacks and project postponements triggered by broader economic concerns.
WFY BUREAU: Leading firms, including Tata Consultancy Services (TCS.NS), Infosys (INFY.NS), and HCLTech (HCLT.NS), witnessed a decline in their employee headcounts during the second quarter, primarily due to lacklustre performance. This prompted Infosys and HCL to revise their revenue forecasts.
Phil Fersht, CEO of U.S. IT advisory HFS Research, emphasized, “The companies went on a hiring spree during 2021-2022 in anticipation of a growth surge this year that failed to materialize. Now, most service providers are focusing on making the most of their existing workforce.”
A slowdown in campus recruitment has exacerbated the apprehension of a potential setback in the U.S. and U.K. economies. It traditionally serves as the primary talent pool for the Indian IT industry. It is renowned for its capacity to onboard scores of engineers for various client projects. This slowdown gained momentum during the April-June quarter and has persisted since then.
Analysts predict a sluggish demand for IT services shortly, reflecting the current reluctance of major IT companies to actively seek new hires as clients tighten their purse strings following the post-pandemic boom.
Over the past two fiscal years, Infosys expanded its workforce by over 83,000, TCS by over 120,000, and HCL by more than 57,000 workers.
In light of the situation, several companies have delayed or reconsidered their plans to recruit fresh talent from universities, instead emphasizing the need to enhance employee productivity and billable work hours per employee.
During the quarterly media call, Infosys CFO Nilanjan Roy acknowledged, “We overshot our hiring estimates, and as the economy slowed down this year, the efficiency of our workforce took a hit. However, we still have a large pool of talented newcomers and room for improvement in their utilization.”
According to Roy, Infosys is now targeting a rise in employee utilization from 81.8% to 84%-85%.
