With three Indian IT giants having reported results for the first quarter of the 2024 fiscal, it is quite clear that the subdued hiring in the Indian IT sector is going to continue as a slow global economy makes projects few and far between.
Tata Consultancy Services, Wipro and HCL Tech are reporting the lowest net additions for the first quarter (of a financial year) in five fiscal years. India’s second largest IT giant Infosys, is yet to release its financial results, but there appears to be a trend, that total addition to the headcount has nose dived for the whole sector, even as the attrition problem abates.
Tata Consulancy Services, Wipro, and HCL Tech added 523, -8812 and -2506 associates to their total headcount respectively in Q1FY24. These are the lowest numbers for Q1 reported by these IT firms in the last five years, except for TCS who lost 4,788 employees from its headcount in Q1FY21. Low additions to the headcount seems to be a persistent problem for atleast three consecutive quarters, starting from the latter half of the 2023 fiscal, as global markets battle with recessionary headwinds, banking crisis, and the European energy crisis due to the Russia Ukraine war.
Most IT firms such as TCS point towards their oder book that continues to be robust during this time period. However during the financial commentary for Q1FY24, K Krithivasan TCS CEO acknowledged that global enterprises are putting pause on non business critical projects.
TCS has gone one step further, just before declaring results for the June, 2024 quarter – TCS’ new hires experienced an unpleasant surprise as the IT firm delayed onboarding lateral new hires by three months- citing project delays.This means that the hiring problem for the IT firm is not going to be alleviated in the current quarter as well.
Most of the IT management remains non committal about when the economic pressures will subside, in the past month, financial analyst firms like Jeffries have only lowered growth estimates for FY24 for the Indian IT sector. This could mean that the season of subdued growth in ranks of the Indian IT sector is going to be a long one.