“Companies over-hired in 2021-2022 with expectations of further growth in 2023, but this has not materialized,” said Phil Fersht, CEO of HFS Research, a US-based IT consultancy.
Accordingly, the recruitment of technology engineers at schools, the key source of human resources for the Indian IT industry, slowed down in the second quarter, stemming from concerns about the recovery of major economies such as the US and Europe.
Analysts say demand for IT staff won't return anytime soon, reinforced by the dismal hiring trends of top service providers during the recent earnings season.
Tata Consultancy Services, Infosys and HCLTech, among other Indian companies, have laid off staff in the last three months due to poor performance. Infosys and HCL have even lowered their full-year revenue outlooks.
The Covid-19 pandemic has seen a surge in headcount across companies. Infosys has added over 83,000 employees in the two financial years, while TCS’s headcount has increased by over 120,000 and HCL has added around 57,000.
However, by the first half of 2023, Infosys' headcount had fallen by 14,470 and HCLTech's by around 4,800. TCS' headcount cut was 5,810 in the same period.
Companies tend to delay university recruitment plans and work to improve the performance of current employees or increase the working hours of existing personnel.
“IT clients delaying their hiring orders has become a major revenue issue for companies,” said Avinnash Gorakshakar, research director at Profitmart Securities. “The US and European economies are still not in the best shape,” making it impossible to execute IT hiring orders for the next six to August.
(According to Reuters)
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