Not just Cognizant: Other IT firms may hire 40% fewer engineers this year

Even if there were no Brexit or US Elections, hiring by IT firms would have been the same

Fresh graduates out of engineering colleges may find getting a job tougher at large IT services firms this year as India's IT industry struggles with new business models.

Technology services firms have traditionally hired thousands of fresh engineering graduates and trained them to build capacity to handle projects of their global clients. Now most of these entry level jobs can be automated, forcing IT firms to reduce their campus hiring.

So Indian information technology (IT) services firms are likely to hire 40 per cent fewer engineering graduates this year. Tech firms have been witnessing a dip in traditional software services and maintenance business, which earns them a major chunk of revenue, as clients are demanding services on digital technology and cloud. This is freeing up people from repetitive tasks such as testing and low-end maintenance.

Infotech companies such as TCS, Infosys, Wipro, Cognizant and HCL Technologies continue to go to campuses, but have offered jobs to 60,000 engineers this year against 100,000 last year.

“Campus hiring dropped by at least 40 per cent from 2015-16,” said Kris Lakshmikanth, chairman and managing director of The Head Hunters India, a recruiting agency for the infotech sector. Industry body National Association of Software and Services Companies last month said growth in overall job creation by the sector was 5 per cent this year.

Infosys, India’s second-largest infotech firm, said it had hired 5,000 people in April-December 2016 against 17,000 in the same period a year ago. Over 9,000 employees were released to other projects because of automation, it added.

Cognizant is likely to ask around 10,000 people to leave as it shifts its business towards digital and consulting, which require skills different from those in traditional services.

“Scrutiny of students this year was more intense. Only a few received offers during campus placement,” said the placement head at an engineering college in Bengaluru.

“There is a demand-supply gap in the infotech industry,” said Rituparna Chakraborty, co-founder and executive vice-president, TeamLease, a staffing agency. Even without Brexit or the US elections, infotech hiring would have been the same because of the shift in technology, Chakraborty added.

Some companies are re-skilling mid-level employees as they face bigger challenges. Lakshmikanth said freshers trained in emerging technologies could replace mid-level staff as companies focussed on cutting costs.