Hiring & firing: IT firms change tack as demand moderates

Indian IT firms have started deferring the joining dates of many freshers and quietly sacking some mid-level staffers who were hired during the pandemic as their clients curtail spending amid economic uncertainties.

That is bad news for the thousands of engineering graduates looking for a break in the Indian technology sector, which is expected to grow at a more modest 8.4 per cent to $245 billion in FY23, according to Nasscom, after seeing explosive growth during the pandemic. It had grown at 15.5 per cent — its best in a decade — to $226 billion in FY22.

Some firms have started reworking the offers made to freshers to promise less pay than what they had originally planned, hiring experts and industry insiders said.

“Hiring activity remains static this year so far with no changes in sight. As far as campus hiring is concerned, it will continue as a strategy. But the number of offers from IT firms will be less and the number of offers that will actually convert into appointments will also be much lesser,” said Aditya Narayan Mishra, CEO of HR consultancy CIEL HR.

“Earlier, conversion used to happen between June and August. But now, it may spread to the next year or so. Many candidates will not wait for long and may opt for other jobs,” Mishra added.

Mid-level staffers, who saw the most rise in salaries during the pandemic that fuelled a digital services boom, have also been feeling the pressure, with many seeing abrupt project changes, transfer to different locations and strict performance appraisals in recent months, industry insiders told DH on condition of anonymity.

Tata Consultancy Services, Infosys, HCL and Wipro did not respond to DH’s emails seeking comment.

“It’s a wait-and-watch period right now,” Supaul Chanda, the global business head of talent engineering firm Otomeyt, said. “No aggressive hiring of freshers this year is anticipated. As far as mid-level staffers are concerned, March-April is the appraisal time. So, after fourth-quarter results, (manpower planning) trends will be clear.” While the top four IT firms onboarded around 2,27,000 fresh engineering graduates through campus placement in FY22, that number was likely to drop to around 1,55,000 in FY23, according to management commentary.

Industry experts urged the IT firms to think beyond the immediate future.

“For maintaining the cost structure and staying ready for new demand,” fresher hiring should continue, according to Pareekh Jain, an IT outsourcing advisor and founder of Pareekh Consulting.

The change in IT hiring strategies comes at a time when many global tech companies are laying off thousands of workers citing reasons ranging from economic uncertainty to weak client spending.