In the second quarter of the fiscal year 2024, Indian IT service providers — Tata Consultancy Services (TCS), Infosys, and HCL Technologies — witnessed a collective decline in their headcount, exceeding 16,000 employees. The industry-wide trend suggests that tech companies are refraining from immediate backfilling of attrition, resulting in a notable reduction in workforce.
Workforce Reductions at a Glance:
TCS observed a reduction of 6,333 employees in its headcount.
Infosys reported a decline of 7,530 employees.
HCL Technologies experienced a headcount decline of 2,299, as per a report by MoneyControl.
Strategic Approaches to Workforce Management:
Milind Lakkad, Chief Human Resources Officer at TCS, explained that the company effectively utilized available talent and optimized gross additions, aligning them with departures during the quarter. This approach enhanced productivity and project outcomes.
Infosys’ Chief Financial Officer Nilanjan Roy attributed the decline in hiring to a proactive strategy of hiring ahead of demand, which is being recalibrated as demand levels off.
HCL Technologies CEO C Vijayakumar highlighted their effective backfilling of attrition with well-trained freshers, resulting from strategic investments made in recent years. These efforts have contributed to improved profitability numbers in the quarter.
Accenture’s Adaptation to Market Dynamics:
Meanwhile, global IT services firm Accenture is adjusting its pay and promotion policies in India and Sri Lanka. The company has opted to skip pay hikes for its employees and reduce promotions at senior positions. These decisions are being influenced by various factors, including the macroeconomic environment and market conditions.
Market Dynamics and Future Outlook:
The hiring index for IT-software/services has consistently declined year-on-year in the first nine months of this year, indicating a prolonged softness in demand and prevailing uncertainty in the overall environment. The IT job index is presently down by 49 percent from its peak levels in July 2022, as reported by Emkay Global Financial Services.
India’s prominent IT firms are adjusting their workforce strategies to align with evolving market dynamics. The collective decline in headcount reflects a strategic approach to workforce management, leveraging available talent and focusing on productivity enhancements. These adjustments are essential in an industry experiencing shifts in demand and a changing economic landscape.