BENGALURU: In the first quarter of this fiscal, many IT firms have slashed their net employee additions, and said hiring will depend on the macro environment. The country’s largest IT services company Tata Consultancy Services (TCS) has delayed the onboarding of lateral hires amid project delays, and HCLTech and Infosys have deferred salary hikes for employees.
Analysts say these indicate that IT firms face a challenging demand environment. Despite this, clients are focusing on digital transformation and emerging technologies like generative AI and all IT majors are heavily investing in this latest technology.
TCS added 523 employees in the June quarter, which is a 96% drop as against the 14,136 employees it added in the year-ago period. Wipro’s employee count has declined by 8,812 people in the first quarter. HCLTech net headcount was reduced by 2,506 people during the quarter.
Speaking at an earnings conference, HCLTech CEO and MD C Vijayakumar, said, “We have made a decision to skip compensation review, starting with the management layer, which is E4+, and defer for junior to mid-level people by a quarter, which is E3 and below levels. We will continue to monitor industry trends and as appropriate, take measures as required.”
Sachin Alug, CEO of NLB Services, said, ‘Current scenario necessitates a prudent approach to recruitment, emphasising quality over quantity. Organisations are likely to prioritise hiring for critical positions and specialised skill sets that align with their growth strategies and the evolving needs of their clients.”
The hiring outlook in IT sector for Q2FY24 is expected to be cautious yet strategic. While hiring volumes may remain relatively muted, organisations will focus on optimising existing talent, strategically acquiring specialised skill sets, and embracing emerging technologies, NLB Services said. During the earnings conference, TCS said macroeconomic uncertainties have resulted in greater caution among clients.
Given the uncertain economic outlook, TCS sees strong client interest in cost optimisation, vendor consolidation, and integrated operations. Companies are upskilling their existing employees instead of recruiting new ones. Wipro is training its associates in AI. TCS is planning to create a talent pool of 100,000 Generative AI-trained associates.