In the first half of fiscal year 2024, the combined workforce of the four major Indian IT service providers, namely Tata Consultancy Services (TCS), Infosys, HCLTech, and Wipro, experienced a substantial reduction of approximately 39,000 employees. This marks a significant shift compared to the same period in the previous fiscal year when these companies collectively added 81,650 employees.
In the second quarter, these Indian IT giants witnessed a decline in their workforce by 21,213 employees. The decrease can be attributed to several factors, including a slowdown in hiring, a focus on optimizing existing resources, and the deployment of trained fresher talent on projects. This approach is being adopted to address increasing uncertainty surrounding demand.
Among the four companies, HCLTech was the only one to experience a decline of 2,299 employees. The other three firms saw steeper reductions, with headcounts falling by over 5,000 in the September quarter.
While attrition rates across the board have declined sequentially, ranging from 14% to 16%, IT firms are deliberately avoiding immediate backfilling of these attrition gaps. The focus is on enhancing workforce utilization to improve operating margins in the current business environment.
TCS has been heavily investing in acquiring fresh talent for the past 18 months, and this investment is starting to yield results. The company is adjusting its hiring approach while attrition rates continue to drop, resulting in a net reduction in headcount.
Wipro is prioritizing operational efficiency, as its utilization rate increased by nearly 470 basis points over the past four quarters, reaching 84.5% in Q2. The company has implemented several measures to optimize its workforce, including reducing bench strength and rationalizing the onshore-offshore mix.
Infosys has a significant number of freshers awaiting onboarding and is refraining from campus hiring this year. The company will assess future hiring needs based on quarterly evaluations.
HCLTech, while avoiding fresh hiring, is achieving its fresher addition targets from the past 18 months. These newly trained freshers are being internally deployed to fulfill attrition backfilling requirements.
While Infosys and Wipro are skipping campus hiring for the current fiscal year, TCS and HCLTech are continuing to onboard freshers. TCS plans to hire 40,000 freshers in FY24, and HCLTech intends to add 10,000 freshers.
Overall, the Indian IT landscape is witnessing adjustments in hiring strategies and workforce optimization to adapt to evolving market conditions and ensure ongoing profitability.
