Dip in tech hirings as slowdown fears rise

Like the bull and bear phases in stock markets, the tech industry has its own hiring and firing cycles. Regrettably, the ongoing mass layoffs follow the hiring frenzy seen just a couple of years ago. As for numbers, layoffs in India are relatively lower than what is witnessed globally. That said,overall hiring numbers have been significantly hit. From startups, which are seeing reduced access to funds, to product,
platform and services companies, the slowdown in IT jobs is unmistakable. Declining sales and economic uncertainties have forced companies to admit their errors of over-enthusiastic hiring during the pandemic years. As Google’s Sundar Pichai mailed his employees recently, the company hired for a different economic reality than the one they faced in 2023. Given the extended fears of a global economic slowdown and recession, companies are realigning workforce strategies.

Indian IT companies aren’t entirely shielded, and net hiring in FY23 has shrunk drastically. While some companies are yet to disclose their annual numbers, Nasscom pegged overall hiring to have dipped to 2.9 lakh in FY23 compared to 3.8 lakh in FY22. Worryingly, hiring hit the skids at the big four, with TCS adding just 22,600 in FY23 as against one lakh in FY22, while Infosys announced 30,000 net additions, 46% lower than FY22’s 54,000. Disappointingly, the trend is likely to continue even this fiscal, with staffing firm Teamlease anticipating a 40% drop in headcount addition this fiscal. Experts are confident that companies will bounce back and hiring momentum will increase.

But what’s worrisome is the delay in the onboarding of campus recruits. Wipro reportedly adjusted its onboarding plans considering the macro environment and business needs, while TCS and Capgemini have vowed to absorb all who received offer letters. The delay in onboarding campus recruits is well-known, and the issue resurfaces every time a slowdown hits the Indian or global economy. But this time, the delay extending beyond 12 months and, in some cases, even more, is most troubling. Some campus hires have offer letters from multiple companies but not one joining letter after an endless wait. The IT industry is no longer a sunrise sector and hires in huge numbers. With experience on their side, companies should avoid overestimating demand. And when they do hire, they cannot return on their valid and enforceable contractual commitments.