India’s top five IT services companies added just under 84,000 people to their overall headcount in 2022-23, compared to the 2. 7 lakh that they added in the previous financial year
Our Bureau
New Delhi
An important event recently, Prime Minister Narendra Modi virtually distributed appointment letters to 71,000 new recruits in the Rashtriya Rozgar Mela. Modi also said that Startups have created more than four million direct and indirect jobs in the country.
But hit by slowing global demand, India’s top five IT services companies added just under 84,000 people to their overall headcount in 2022-23, compared to the 2. 7 lakh that they added in the previous financial year. That’s a 69% drop. The total addition for TCS, Infosys, Wipro, HCL and Tech Mahindra last year was slightly lower than even the addition in the Covid-hit year of 2020-21.
Infosys and TCS led the additions, with Infosys adding close to 30,000, and TCS adding 22,600. Tech Mahindra added the least, at 1,227. The final quarter was particularly bad, with Tech Mahindra, Infosys and Wipro reporting declines in headcount. For Wipro, this was the second consecutive quarter of reduction in the employee count. In the December quarter, it reported a decline of 500.
All these firms have been facing headwinds. Clients are delaying decisions on tech investments; some are even cancelling projects. This, coupled with attrition moderating over the last few quarters, led firms to add fewer people.
The companies now have a good bench strength to deploy on projects, a lot of it due to the addition of freshers. “A lot of them on the bench are getting skilled and are getting trained. So, we have quite a leeway for the next few quarters in terms of the availability of freshers,” Nilanjan Roy, CFO of Infosys, said at the earnings press conference. Including trainees, Infosys had a utilization of only around 76. 9% in the final quarter of FY23.
Namratha Dharshan, chief business leader – India Research at technology research and advisory firm ISG, notes that during the period of good growth and high attrition, IT services providers were hiring two people for every person who left.
Now, with growth slowing, many are sitting idle. This explains why most of these companies are delaying onboarding of freshers who were given offers in the past few months. Hiring of laterals (those with experience) has dropped sharply.
“Companies have restricted employment to high-demand skills like AI, data science, and cybersecurity,” Dharshan says.
Following its latest earnings announcement, TCS said it is trying to develop its resources internally, by upskilling them, rather than looking out for talent in the market.
The problem of jobs is a worrying sign for the government which is trying to show that its policies are creating jobs. With this objective, Modi virtually distributed appointment letters to 71,000 new recruits in the National Rozgar Mela and congratulated the candidates and their families for getting the appointment letter.
Modi remarked that the government is committed to providing the right opportunities for the talent and energy of the youth to achieve the resolutions of a developed India. The Prime Minister highlighted that the process for government recruitment is taking place at a fast pace in NDA-ruled states from Gujarat to Assam and Uttar Pradesh to Maharashtra.
He noted that recruitment letters to more than 22,000 teachers were handed out in Madhya Pradesh. “This Rozgar Mela is proof of our commitment towards the youth of the nation,” Modi added.
Noting that India is one of the fastest growing economies of the world, the Prime Minister said that the world is seeing India as a bright spot amidst the global challenges of recession and pandemic.
But Congress president Mallikarjun Kharge took a swipe at Prime Minister Narendra Modi over the Rashtriya Rozgar Mela and said that he is distributing “recruitment letters” in the name of employment.
Stating that there are 3,01,750 vacancies in Railways, out of which 50,000 letters were given for the Ministry of Railways, Kharge called it “Too Little, Too Late”. “Modi ji, is again distributing “recruitment letters” in the name of employment. In the event, 50,000 letters are from the Ministry of Railways only. There are 3,01,750 vacancies in Railways. Thirty lakh posts are vacant in government ministries. “Too Little, Too Late” — This stunt done in the tenth year of the Modi government fits perfectly,” the Congress president tweeted in Hindi.
