homebusiness Newscompanies NewsIs there a risk of layoffs in Indian IT after massive job cuts at Accenture, Meta and Amazon?
Is there a risk of layoffs in Indian IT after massive job cuts at Accenture, Meta and Amazon?
Indian IT companies hired aggressively in the financial year 2021-2022. However, the hiring momentum has now started to cool off given the demand moderation and decline in attrition.
Accenture is letting go of 19,000 of its employees or 2.5 percent of its workforce over a period of the next one and half years. Accenture currently employs over 7 lakh people and is estimated to have the largest employee base of three lakh people in India.
The question that now arises is where does Indian IT stand? Here’s a look at data points
Indian IT companies hired aggressively in the financial year 2021-2022. TWITCH (TCS, Wipro, Infosys, Tech Mahindra, Cognizant, HCL Tech) hired equivalent people at a net level in FY22 as compared to the cumulative hiring undertaken through FY17- 21, according to data from Axis Cap.
However, the hiring momentum has now started to cool off given the demand moderation and decline in attrition.
The net headcount addition across top-4 tier-1 IT, i.e. TCS, Wipro and HCL Tech was at less than 2,000 compared to 50,000 to 70,000 a few quarters ago.
The reason behind the slowdown in hiring is the rapid decline in quarter-on-quarter attrition. Most companies have recorded sharp drops quarter-on-quarter in attrition rates.
Also, given the layoffs in startups and major tech firms, not many employees are looking to switch jobs. Most companies will look to flex margin levers as demand slows down. It must be noted that current margins are already below pre-COVID levels, and one of the ways to improve margins is to bring down the employee expenses.
Since employee expenses have ballooned over the recent quarters, it won’t be a surprise if companies maybe become far more selective in their wage hikes/promotions in FY24.
First Published: Mar 24, 2023 1:18 PM IST
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