Caution: Campus hiring by Indian IT services giants is in the slow lane

The management of the companies said that excessive hiring in the last few years has meant recalibration of employees as growth dipped

The writing is on the wall.

With the total headcount of the top three information technology (IT) services firms dropping, it seems that campus hiring for 2024-25 by the Indian IT services giants is in the slow lane.
 

As Indian IT services bellwethers grapple with macroeconomic headwinds, the top three players have witnessed a negative headcount trend.  The top three IT services players — Tata Consultancy Services (TCS), Infosys, and HCLTech — saw their total headcount decreasing in unison. TCS saw its headcount reduced by 6,333. Infosys’ headcount decreased by almost 7,500, and HCLTech saw its employee numbers shrink by 2,299.

These headcount reductions occurred even as companies saw a drastic decline in attrition. The reasons for the decline were similar among all three.The management of these companies mentioned that the excessive hiring of the past few years required a recalibration of employees due to the dip in growth.

HCLTech was the only exception, as it continued to onboard new employees. The firm stated that it added 3,630 freshers.

“We are broadly on track with our quarterly hiring plan for the year, aiming to conclude the year with approximately 10,000 freshers hired. Attrition, at 14.2 per cent, is one of the best years remaining close to pre-pandemic levels,” said Ramachandran Sundararajan, chief people officer of HCLTech.

For Infosys, the negative headcount of 7,530 for the quarter represented the steepest fall for the company. Importantly, this marked the third consecutive quarter of declining headcount. In the first quarter of 2023-24 (FY24), Infosys’ headcount was down by 6,940, and in the fourth quarter of 2022-23 (FY23), it decreased by 3,611. In Infosys’ case, the company is still in the process of calibrating its timeline for campus recruitment.

Infosys Chief Financial Officer Nilanjan Roy added that despite the drop in headcount, there is still room to improve the company’s pyramid structure.

“Our utilisation is at 81.8 per cent. Despite reducing our headcount by 7,000, our utilisation only increased by 70 basis points. We still have room for further utilisation improvement in the future. As we continue to grow, we can tighten utilisation,” he said.

For TCS that has hired over 200,000 employees in the past two to three years, the company intends to fulfil its commitment to all 40,000 freshers to whom it extended offer letters for FY24. However, there might be a delay in their onboarding process. This marked the second consecutive quarter of a decline in headcount for the company. In the third quarter of FY23, TCS saw a reduction in headcount by 2,197 employees.

Milind Lakkad, chief human resource officer of TCS, stated that the company continues to hire both freshers and experienced professionals.

“We have been onboarding freshers, though the exact number may vary each quarter. We do anticipate some delays in onboarding freshers by a quarter or two, but we will honour all our offers," said Lakkad during the press briefing.