TCS, Infosys, HCL Hiring: IT Companies Going Slow On Onboardings Amid Layoffs

TCS, Infosys, HCL, Wipro Hiring Status: In line with the developments globally, Indian IT services companies are also slowing down on hiring amid fears of an impending recession and declining profitability. According to a livemint report, India’s top-5 IT services companies have reported a sequential decline in sales and support staff in the September 2022 quarter.

It said the companies are letting go of non-revenue-generating people and putting an informal freeze on hiring. Tech Mahindra and Wipro posted a q-o-q decline in the number of software engineers and sales & support staff, respectively, in Q2FY23.

Companies, including both domestic and global, resorting to layoffs to cut costs and boost profitability. Startups are also facing funding dry spell.

Hyderabad-based Cyient and L&T Technology Services have also witnessed lower sales staff in the quarter. Another IT firm Zensar also posted a sequential reduction in workforce. This is the first sequential decline in headcount at any large IT firm since April-June of 2020, according to the livemint report.

The slowing in staff hiring is being witnessed after the IT services companies went on a hiring spree due to the lockdown-induced online shift of businesses during the pandemic.

“Profitability is under pressure… When there is uncertainty on demand, we have to take these steps (a freeze on hiring and approvals for expenses more than $10,000). We believe…all firms are becoming pragmatic on controlling costs,” an executive from Wipro was quoted in the report as saying.

A Zensar spokesperson, as per the report, said, “Headcount movement is in line with industry cycle… We did mention earlier that we have taken some clear measures for margin improvement, and non-essential travel has been identified as one of the levers. The firm is in the midst of implementing a very focused and disciplined margin improvement programme that includes multiple levers, including improvement in service mix, improvement in commercials, improvement in utilization, optimisation of the pyramid and optimization in support costs and cost of talent acquisition.”

See also  Budget 2023 Expectations: FICCI Seeks Increase In Import Duty of Aluminium

Recently, according to reports, major IT companies, Infosys, Wipro and Tech Mahindra, have revoked offer letters it extended to students after the companies are delaying the onboarding process for months. The students said they have not been given any grounds for rejection.

Indian IT companies — Tata Consultancy Services (TCS), Infosys, Wipro and HCL Tech, among others — are facing high attrition rates and the IT sector’s average attrition rate (last twelve months) is currently as high as 25 per cent. The past few quarters have seen higher attrition rates, and the hiring has slowed.

Infosys reported voluntary attrition of 27.1 per cent for the September 2022 quarter (Q2FY23). Although it was lower than the previous quarter’s 28.4 per cent, it is higher on a yearly basis as compared with the 20.1 per cent recorded in Q2FY22.

HCL Tech’s attrition (last twelve months) remained at 23.8 per cent in Q2FY23, TCS attrition rate in IT services was 21.5 per cent during the September 2022 quarter (higher than 19.7 per cent in the previous quarter and 17.4 per cent in the March quarter). Wipro’s voluntary attrition, measured in the trailing 12 months for the quarter, was at 23 per cent, a moderation of 30 bps from the previous quarter.

Read all the Latest Business News here