India’s top three information technology (IT) companies have reported a reduction in headcount by 4,536 in the first quarter ending June 30, 2024, amid a continuing uncertain demand environment.
IT companies have been decreasing their bench strength and deploying previously recruited employees. Human Resource heads unanimously said they would first put the existing workforce to use, and hiring will resume if and when demand picks up pace.
However, behemoth Tata Consultancy Services (TCS) is the sole outlier among these IT firms, which reported an increase of 5,452 employees for the quarter.
Infosys and HCLTech cumulatively saw their headcount drop by 9,988 in Q1.
HCLTech saw its headcount reduce by 8,080, the steepest fall in at least the last five years, while Infosys’ headcount declined by 1,908 employees.
HCLTech
HCLTech said it lost around 7,398 employees due to a divestiture. In April 2024, HCL Investments UK got into an agreement to sell its entire 49 percent stake in a joint venture (JV) with US-based State Street International Holdings.
Speaking at the Q1 earnings conference on July 11, Ramachandran Sundararajan, Chief People Officer at HCLTech, stated that headcount remains essentially unchanged, except for the reduction due to the divestiture.
“(Headcount is) in line with what we had planned given the investments we had made in the previous quarters in preparation for the offshore transitions planned for a couple of large engagements,” Sundararajan said.
Also read: HCLTech sees headcount decline by 8,080 in Q1FY25
Infosys
Speaking at the company's Q1 earnings conference, Jayesh Sanghrajka, CFO of Infosys, explained that the headcount decline is attributable to several factors. One significant reason is the company's recent shift in its hiring model over the past few quarters, focusing on recruiting fresh graduates both on and off campus.
“Our utilisation rate is already at 85 percent, so we have little headroom left now. As we start seeing growth we will look at hiring," Sanghrajka added.
Also read: We hire more than half of our freshers off campus: Infosys CFO
He added that Infosys will hire 15,000-20,000 freshers in FY25, depending on the growth.
Tata Consultancy Services
On July 11, Chief Human Resources Officer Milind Lakkad said the net headcount addition is a matter of immense satisfaction.
“I am delighted to announce the successful completion of our annual increment process. Our continued focus on employee engagement and development led to industry-leading retention and strong business performance,” Lakkad added.
In FY24, the Mumbai-based firm’s headcount fell for the first time in 19 years, a first since the company listed on the bourses in 2004.
Also read: TCS headcount up 5,452 in Q1, reverses decline of 3 quarters
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