K. T. Rama Rao, Bharat Rashtra Samithi (BRS) Working President, recently highlighted a decline in IT employment in Telangana. He shared data showing that the number of jobs in the sector dropped from 1,27,594 in 2022-23 to just 40,285 in 2023-24.
Well, the picture is not much different in the entire country. As per the Nasscom data, the IT sector will create only 60,000 new jobs in FY24 compared to 2,70,000 jobs that were created by the sector in the previous fiscal year.
And with Indian IT companies like Wipro, TCS, and Infosys delaying the onboarding of 10,000 freshers, and refusing to provide a joining date, it is evident that the sector continues to witness a trend of decline.
Is There Anyone Hiring?
In FY24, Infosys hired 11,900 freshers, marking a significant 76% decrease from the 50,000 hired in FY23. Similarly, TCS recruited 40,000 freshers in FY24, experiencing a slight reduction from the 44,000 hired the previous year.
Wipro’s hiring also dropped by up to 50%, with only 10,000–12,000 freshers onboarded in FY24, compared to 20,000 in FY23.
On the other hand, Cognizant and Capgemini were more aggressive in their FY23 hiring, bringing on 60,000 and 61,182 freshers, respectively, though data for FY24 isn’t provided for these two companies.
The trend of this decline in hiring is accompanied by an increase in layoffs. India’s IT sector laid off around 20,000 techies during the calendar year 2023, described as a “silent layoff,” according to data shared by All India IT & ITeS Employees' Union (AIITEU).
Sources indicated that Infosys laid off nearly 200-500 employees in 2024, though company CEO Salil Parekh said that there were no plans for downsizing or job cuts. Further, the January 2024 report mentioned that Wipro is firing a mid-level workforce to enhance profit margins.
Is GenAI the Reason?
Funnily enough, at the same time, many of the graduates do not want to join the Indian IT firms. The reluctance of recent graduates to pursue careers in Indian IT can be attributed to the prolonged stagnation of entry-level salaries, which have remained at INR 3.5-4 LPA for over a decade. High-paying product companies with compensation packages ranging from Rs 10-20 LPA have become more attractive.
Meanwhile, Indian IT is upskilling its existing employees with genAI, instead of hiring new ones. This is also one of the reasons why the workforce is declining and the benches are full.
As of Feb 2024, the top 10 Indian IT services companies including TCS collectively had nearly 450 genAI projects and proofs of concept (PoCs) in development, reflecting a current deal pipeline valued between $150 million and $250 million, as per the data by market intelligence firm UnearthInsight.
Sonata Software, a mid-tier IT company, reported that around 80% of its project pipeline is focused on genAI, according to chief information officer Samir Dhir. The company has a $50 million AI deal pipeline.
Out of 6,532 employees only about 2,000 are currently trained in genAI, with the company aiming for 50% of its staff to be trained in this field by 2025.
Therefore, freshers need to be already trained with genAI if they want to compete with the ones being trained at the IT firms. But, there is a significant gap between the curricula and industry expectations when it comes to employees being generative AI ready.
Despite this, 70% of academic institutions believe their graduates are job-ready. In reality, only 16% of companies share the same view.
In June, TCS struggled to hire for 80,000 job openings citing skill gap as the reason. The same is true for Wipro. The IT giant recently announced that it is now rolling out 30,000 offer letters for freshers from 2022 with a compensation of INR 3.5 LPA, and other CGPA requirements.
The truth is that it is extremely difficult to find good, or even decent, software engineers with coding skills for such small compensation. At the same time, there is a supply of mediocre graduates who are not ready for taking up jobs.
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