Hirings drop in TCS, Infosys, HCL in FY23: Here's why
What's the story
IT companies around the world have been struggling for the past year. Things haven't been any different in India as well.
India's IT majors, including Tata Consultancy Services (TCS), Infosys, and HCL Technologies, have been affected by the global economic slowdown.
Their FY23 numbers are a testament to that. The companies have cut down hiring significantly.
Let's see the numbers.
Context
Why does this story matter?
The post-COVID economy has been tough on tech companies. We have seen some of the world's biggest tech companies terminating roles to cut costs and stay afloat.
Apart from laying off employees, the firms have also reduced hiring. This change is visible in India too.
Once known for hiring en masse, there is a significant fall in the hiring numbers of IT companies.
India
TCS's hiring fell by 78% in FY23
The hiring numbers of India's tech majors in FY23 are down in the gutters. TCS, which hired 1,03,000 people in FY22, added only 22,600 in FY23.
Hiring in FY23 was 78% lower than in FY22. Similarly, Infosys saw a 46% decline in employees added in FY23 compared to FY22.
The company hired 54,396 staffers in FY22, while it only added 29,219 people in FY23.
Quarterly results
HCL added about 57% fewer employees in FY23
Both TCS and Infosys had unimpressive last quarters in FY23. The IT giants missed analysts' expectations.
HCL, on the other hand, had a surprisingly positive performance in the last quarter, offering some solace to IT investors.
However, HCL's hiring also went down in FY23. The company saw a steep fall of over 57% in FY23 compared to FY22.
Reasons
Companies have reduced tech spending considerably
Indian IT companies are reeling from the impact of a global economic slowdown. The macroeconomic environment is still not conducive to growth.
This reduced technology spending in the US and Europe. The collapse of two US banks and the Credit Suisse buyout added to the caution.
With recessionary fears still intact, it will be a while before discretionary spending reaches previous levels.
Future
India's IT giants will lean on already hired freshers
India's IT companies are not expected to get back to their old levels of hiring soon. Ram Sundarajan, HCL's chief people officer, believes hiring will be moderate in the next few quarters.
Infosys's CFO also expressed similar views. These companies have a reserve of freshers who are yet to be onboarded.
India's IT giants will lean on them for more manpower.