Indian IT companies press Pause button on recruitments

Indian IT companies pauses recruitments
Indian IT companies pauses recruitments

Indian Market
by 5paisa Research Team Last Updated: 2022-11-09T17:26:36+05:30

From the lows of the pandemic, the IT sector saw one of the most unprecedented surge in demand and revenues. That resulted in a period of rapid expansion in manpower to cater to the increasing needs of the client base. Things have changed a lot in the last couple of quarters. Indian IT services companies are literally hitting the pause button on fresh manpower recruitment. Just to give a simple statistical hint; in the latest quarter, 5 out of the top 10 IT companies saw sequential fall in the number of sales and support staff. IT companies have been letting go the non-revenue generating employees.


In short, there is already an unofficial freeze on hiring and it is just that nobody is talking about openly. Wipro and Tech Mahindra, that are among the top IT companies in India, have reported a sharp fall in the number of sales and support staff as well as of the numbers of software engineers on a sequential basis. This is also true of smaller sized IT companies in India. Some of the mid-sized IT companies like LTTS and Cyient have seen a fall in their workforce numbers as has Zensar. It is not that IT companies are giving the pink slips. They are just not filling up the vacancies created by the exits amidst high attrition.

Also read: India’s IT companies face a demand slowdown in coming quarters?


Perhaps, this situation has to do with the excess staffing and recruitment done between 2020 and 2022, post the pandemic. In these 2 years, the 10 largest IT companies in India added close to 5 lakh workers or nearly 33% to their workforce. That is now coming home to roost. By mid FY-23, the total staffing of the ten largest IT companies was closing in on 2 million and there were just not enough projects to boot. To add to their misery, the recent hawkishness of the Fed has raised the bogey of recession and put the Indian IT industry at the real risk of a sharp cut in technology spending by global corporates in the US and EU.


It looks like the fears of an impending recession and it is not so encouraging repercussions that is holding the IT companies back. Most of the IT companies are just not in a hurry to fill up empty positions and that means the attrition will also come down gradually. That is like hitting two birds with one stone for the IT companies. The mood has changed on the back of fears that an impending recession and falling profitability could be the big overhang for the IT sector. Even the big guns like TCS, Infosys and HCL Tech are going slow on recruiting top dollar professionals at senior position. That is a new problem to have for the IT sector.


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