IT Companies hiring: Top four IT companies add just 1,940 employees in Q3


India’s top four software exporters — Tata Consultancy Services, Infosys, HCL Tech and Wipro — together recorded a net addition of 1,940 employees in the quarter ended December 2022, the lowest in 11 quarters, as demand for technology services slows amid global macroeconomic uncertainty and geopolitical concerns.

The decline marks a sharp drop of nearly 97% from the net addition of 61,137 employees by the big four IT firms in the third quarter of FY22 when they competed aggressively for talent to meet the rising demand for digitisation triggered by the pandemic. This is also a nearly 94% drop from a net addition of 28,836 in the second quarter of FY23.

“The rise and (now) drop in the net headcount of the top four (IT firms) over the last 11 quarters, is reflective of the macro technology trends at play,” said Kamal Karanth, co-founder of Xpheno — a specialist staffing company.

At the end of December 2022, India’s largest IT exporter Tata Consultancy Services’ overall headcount dropped by 2,197 employees. In Bengaluru, Wipro recorded a decrease of 435 in the same period. The IT majors also saw a sharp drop in attrition in the quarter, which is seasonally a weak period for IT hiring.

Hiring firms estimate the ongoing slowdown in IT hiring, which began nearly six months ago, will deepen in the coming months driven by “geopolitical scenarios, impending recession and cost conservation by companies,” according to Sachin Alug, CEO at talent solutions company NLB Services.

TCS, Infosys and HCL Technologies did not reply to email queries.

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While Wipro, which termed talent as its “biggest asset” said it would “continue to make the necessary investments to develop and nurture our talent. We are passionate about creating an environment where skilled talent comes to build exciting career paths and we will continue to do what we can to create that environment for our employees.”Strong fresher intake

Meanwhile, each of the top four IT majors could hire between 15,000-50,000 fresh engineers from campuses in 2023, as they look to drive down talent spends, talent experts’ estimate.

This comes on the back of aggressive on-campus hiring by tech exporters in recent years. Collectively the top four IT firms on boarded around 227,000 freshers in fiscal 2022.

Staffing experts also expect attrition to decline as IT firms go slowly on lateral hiring at senior levels.

Also read | Wipro, HCL Tech continue to add employees in Q2

TCS’ voluntary attrition for the quarter stood at 21.3% down 30 basis points over last quarter while Infosys’ metric fell to 24.3% compared with 27.1% sequentially.

Noida- headquartered HCLTech said its attrition for the quarter stood at 21.7% compared to 23.8% reported last quarter.

Wipro, too, reported a dip in attrition which stood at 21.2% in the third quarter compared to 23% during Q2.

IT executives termed the sharp dip in headcount as a result of better talent management and not reflective of the overall demand for technology services.

“We made a significant hiring of fresh talent last year as well as the first half of this year. (We) made significant investment in talent development to make them productive and that is now paying off,” said Milind Lakkad, chief HR officer at TCS during the post Q3 earnings.

While at Infosys, “very substantial” bench strength with recently hired freshers and utilization levels at 81.7% gives the company “headroom to be more productive even with the current employee strength,” according to CFO Nilanjan Roy.

Demand for specialist skills

Despite the headwinds, demand for skilled talent in domains such as blockchain, cybersecurity, DevOps, and cloud computing is expected to be high according to hiring experts.

Namratha Dharshan, director of research and principal analyst of global IT research and advisory firm ISG, reckons aggressive hiring during the pandemic when ‘annualized employee growth peaked at 26% in Q3FY21,’ is now returning to “pre-pandemic levels of 10%”.

The industry is getting into a predictable pattern in terms of demand and hiring, she added.

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