There has been a general sense of
uncertainty in the information technology (IT) services sector, one of the most favoured by Indian students. And the hiring numbers shared by India’s top three — TCS, Infosys, and HCLTech — are not helping freshers. The three firms saw an overall decline of 16,162 employees in their total headcount in the July to September quarter.
What's disheartening is that these companies have indicated this trend is likely to persist as they look to “optimise” costs. While
Infosys has clearly said the firm would not conduct any more campus hiring this year, Tata Consultancy Services (TCS), which set a target of hiring 40,000 freshers this year, has admitted to delaying onboarding for entry-level positions though it continues to engage with the candidates.
One firm, meanwhile, is still going on with planned hirings.
HCLTech, in an interview with Business Today, said it had hired nearly 5,000 people in the first half of the fiscal quarter, which includes 3,630 freshers in the September quarter, and expects the number to be similar for the remaining financial year taking the total fresher hiring to 10,000 during FY24.
TCS and Infosys have categorically pointed out that they have enough bench strength and that their training in the first two quarters is now “paying off”. The latter also claimed it has over a lakh strong workforce for Gen AI projects.
TCS CEO K Krithivasan said, “When they're available for us to be deployed in programmes, we try to use them and it's important for us to give them the opportunity to work on projects. So, there is no need to hire as many people.”
In an exclusive interaction with CNBC-TV18, Krithivasan admitted that the
hiring at TCS was less than the number of people who departed from the firm during the quarter under review. He noted that headcount reduction is a margin lever and that is reflected in the second quarter results.
Infosys CEO Salil Parekh said the company is carrying inefficiencies in its employee pyramid and has enough room to tighten utilisation to 84-85%, which is a margin lever for the firm. He said the company has a tremendous focus on cost efficiency and automation, in which it has an advantage and is winning mega deals.
The firm’s Chief Financial Officer Nilanjan Roy, in a press briefing, said, Infosys still has a significant fresher bench that is training on Gen AI, etc. and every quarter, the number of employees training in GenAI is going up. Therefore the company is not looking to make fresh campus hires yet, he said.
The decline in hiring has been going on for at least six quarters, with the hiring numbers dropping to negative for top tech services firms in the last two quarters. With this, attrition has eased to below 15% for all three — TCS, Infosys, and HCLTech — that have reported their results until now.
The reduced numbers come against the backdrop of many macroeconomic headwinds including a looming global recession and also amid fears that the inclusion of AI may limit the number of basic coding job opportunities.
Nicolas Dumoulin, Senior Managing Director India and Thailand, of staffing firm Michael Page India, earlier told CNBC-TV18 that
Gen-AI would eventually replace basic coding roles in IT services firms. However, with the increased use of AI, there will surely be cybersecurity concerns and thus, there is a need for talent that can find and fix flaws in automated codes. This kind of talent is scarce in India at present, he claimed.
“This decrease (in headcount) is attributed to a deliberate recruitment approach aimed at acquiring highly capable fresh graduates and subsequently investing in their skill development through appropriate training initiatives,” staffing firm NLB Services said.
It also said that prospective campus recruitment activities could potentially be impacted during the subsequent quarter, primarily due to project cancellations and an unpredictable demand landscape.
However, the company believes many organisations are focusing on augmenting their talent pool as they anticipate a demand revival across the industry for 2024-25.
Sachin Alug, CEO of NLB Services, said, ‘With opportunities emerging in the spheres of green technology, electric vehicles, and a heightened focus on AI and cybersecurity, IT firms are eagerly seeking skilled professionals to capitalise on these prospects. Moreover, IT companies are projecting a robust hiring outlook of nearly 8-10% in the third quarter.”
