Amid budget cuts by Western countries and geopolitical risks, hiring fell at nine out of 10 Indian IT companies in the July-September quarter. Mint reported on Monday. It is the first time in more than 25 years that the workforce in this sector, which is considered crucial to the country’s economic growth, has shrunk.
The Mint report added that the year ending March 31, 2024 could be the first time that IT companies end up with fewer employees than at the start of the financial year. The workforce in the top 10 companies fell to 2.06 million at the end of the July-September quarter. At the start of the quarter, these companies had 2.11 million employees.
Only L&T Technology Services has seen a growth in their workforce. The company added 32 people in the quarter, bringing its workforce to a record high of 22,265. All other companies, including Tata Consultancy Services, Infosys, HCL, Wipro, Tech Mahindra and Persistent, saw their workforce decline. Total job losses are 51,744.
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“It is not right that we are not hiring,” an Infosys executive said in the report. “But we are not hiring in numbers that can compensate for the number of people leaving the company as part of natural attrition. So you can say that the workforce (at the end of the year) may be less than what we started with. “
Sunil Chemmankotil, CEO of staffing agency TeamLease Digital, also said: “These are testing times for the IT giants.”
“Changing deal types, pressure on margins and looming uncertainty leave them very few options when it comes to talent strategy. It will certainly be a lower headcount (at the end of the year) than where we started this year. Perhaps it is time to consider newer talent options such as staffing and gigs, along with the latest productivity-enhancing technologies,” said Chemmakotil.
Most companies have also lowered their revenue forecast for the coming quarters.