Indian IT firms to slash tech hiring by 40% in FY24

Inflationary pressures, the Russia-Ukraine crisis, and the United States and European banking spiral have made the Indian IT industry cautious.

IT companies in India may cut down hiring of engineers by around 40 percent year-on-year (YoY) in FY24 as they remain wary of the prevailing global outlook, The Economic Times reported citing data from TeamLease.

The data showed that in FY23 so far, IT companies have added a net headcount of around 280,000. Chief executive officer of TeamLease Digital Sunil C expects hiring in Q4 will 'remain flat' as attrition and growth visibility have reduced. “We expect a 30-40 percent drop based on the current outlook. But this could change six months down the line if companies change their growth forecasts,” Sunil added.

Global factors

Inflationary pressures, the Russia-Ukraine crisis, and the US and European banking spiral have made the Indian IT industry cautious. Further, record hiring and attrition numbers in FY22 and H2FY23 have kept costs high.

Also Read Job search platform Indeed to cut 2,200 jobs

Staffing company Xpheno told ET that this quarter may see negative headcount growth among IT companies as the top eight firms hire less. Co-founder Kamal Karanth said expansion hiring will be 'dull, if not absent'.

Last week Accenture announced 19,000 job cuts to manage cost, only Cognizant added 5,900 jobs and the next two quarters don’t seem optimistic on net job additions.

TeamLease added that in current conditions there is also less risk of people leaving their jobs and Sunil said that they cannot confirm layoff plans, restructuring may be on the cards.

Off-shore benefit for India

International companies’ off-shoring roles to India may be the silver lining in this market condition. AR Ramesh, director - managed services and professional staffing at Adecco India, told ET that backfills and replacement hiring will continue. Mrinal Rai, principal analyst at ISG feels skilled jobs will benefit while non-billable roles are more likely to be axed.

Also Read: India has 45,000 open jobs in Artificial Intelligence: TeamLease