OCTOBER 14, 2023
It is not just the freeze in hiring that is troubling, but the fact that companies are even holding off on increments and are reducing headcounts.
India ’s top IT companies have hit the brake on fresh hiring. Industry bell-weather Infosys has decided to stay away from campus recruitment this financial year and leader TCS is recalibrating additions to its total headcount. Others such as Wipro and HCL Technologies, too, do not seem enthusiastic. According to staffing firm TeamLease Digital, the industry collectively hired about eight lakh freshers over the last two financial years. But worryingly, some of the companies are yet to bring on board all of those fresh hires and are taking a measured view on handing out offer letters this year. Considering the spurt in intake in the recent past, TeamLease predicts a 30 per cent decline in IT hiring this year, which would add to the overall unemployment rate.
The sector usually absorbs 20-25 per cent of the 1.5 million or so engineering graduates who join the workforce every year. An estimated 70-80 per cent of the fresh manpower demand is met through campus recruitment. But companies are going slow on hiring because the demand from key markets like the US is softening. Engineering colleges acknowledge that it is a tough placement season, which is usually spread between July and September; they now expect hiring for this year’s batch to extend to next year, hoping that the economic uncertainty will have reduced by then. The hiring slowdown has a number of underlying reasons that include a global demand decline, transition to technologies such as new-age automation, the need to optimize the use of current workforce, and the need to increase utilization rates. It is not just the freeze in hiring that is troubling, but the fact that companies are even holding off on increments and are reducing headcounts.
Everyone had expected companies to go back to their hiring spree when industry attrition rates fell in the first quarter of 2023-24. But the second quarter brought the bad news of job cuts at mass recruiters such as TCS, Infosys and HCL Technologies. In the backdrop of a challenging demand environment and global macroeconomic doubts, the hiring slowdown is an undeniably worrying pointer. It comes at a time when India’s unemployment rate seems to be on the mend. Official data confirmed this week that urban unemployment declined to 6.6 per cent in the first quarter—the lowest rate since the launch of periodic labor-force surveys in 2018. A prolonged slowdown in hiring and reduction in the overall IT workforce will add to the country’s joblessness and is not a good beginning for the election season.
Courtesy: Indian Express / PTI
