Amidst rampant tech layoffs at top firms in the world, Indian IT majors are showing signs of disparity in hiring freshers as they are mostly focusing on training and upskilling their existing employees, alongside scaling work automation and digital initiatives.
However, there are exceptions. Tata Consultancy Services (TCS) recently announced that it is planning to hire around 35,000-40,000 freshers in FY24, just as it does every year.
TCS COO, NG Subramaniam said, “We usually hire between 35,000 to 40,000 people and those plans are intact.” Additionally, the COO also confirmed that the firm is not planning to conduct any large scale layoffs. In fact, the company wants to train the hires and reduce the bench size.
“The way we’ve calibrated this is we’re working towards improving our own utilisation because we have a decent bench,” he noted. TCS has around 10% of its employees on the bench.
Similarly, HCL Tech is also recalibrating its freshers target this year. The company wants to hire 10,000 freshers within the next half of this financial year, as per a statement from the CFO Prateek Aggarwal. Though Tech Mahindra hasn’t cleared its plans for the year, the company has been hiring around 15,000 freshers since last year.
Focus on training and automation
Most of the IT firms have been expanding their relationships with cloud providers such as Microsoft, Google, and NVIDIA to upskill their workforce. TCS and Infosys have partnered with NVIDIA to train their employees in generative AI. Tech Mahindra also partnered with Microsoft for modernising its business operations.
Apart from introducing a strict dress code for its employees while returning to office, TCS is focusing on improving the utilisation of its employees amid the slowdown in the sector. “All these people were going through training, induction, and upskilling in the last 12 months. They’re available as a productive pool to be deployed into various projects,” Subramaniam added.
He explained that when there is a contraction in discretionary spending, companies hire a lesser number of laterals. The Indian IT hired a huge number of employees after the pandemic in 2020, and then began cost cutting. On top of that, the attrition rate was huge, so TCS decided to hire more employees to build a large bench. “Our utilisation is currently around 85%. We used to operate at about 87-90 per cent,” said Subramaniam.
However, not all IT companies are following the same trend. Infosys has decided to not hire freshers from campuses this year. As mentioned by TCS, the biggest reason for this is a huge bench, and thus wants to reduce cost. In a press conference, CEO and MD of Infosys, Salil Parekh said that the company is carrying “inefficiencies in its employee pyramid and has enough room to tighten utilisation to 84-85 per cent”.
CFO Nilanjan Roy said in the second quarter briefing that the company is training its employees on generative AI, and wants to focus on that instead of hiring more freshers. The company hired 50,000 freshers last year, which is higher than TCS. Thus, the company wants to focus on the utilisation of its bench.
Not all good news
Despite this, Infosys has also said that it will honour all past letters, contrary to the news last year that the companies have been rescinding the offer letters. The IT firm was also in the news for firing 600 freshers for failing an internal test and also slashed variable pay by 40 percent for employees in the quarter that ended in March 2023.
Wipro, on the other hand, has also decided to reduce hiring engineering students citing it as a response to reduced spending by cautious clients. Similar to Infosys, the company wants to onboard the employees who have already been offered jobs. Chief human resources officer, Saurabh Govil said that the company hired 22,000 freshers in March, but plans to hire lesser people this fiscal year.
Accenture is the most interesting of the bunch. After 19,000 layoffs this year, the company has decided to not hike the salaries of its employees in India this year. The IT giant is also delaying hiring freshers to cut costs and “grapple with the present economic conditions”.
In April, LTIMindtree asked all its freshers who received offer letters in 2022 to attend Ignite, the company’s training program to check if they should be onboarded, which would be based on business demands. This has resulted in a delay in joining, leaving freshers crying foul.
It is important to note that despite hiring freshers, there has been a looming fear of economic recession, particularly in the US and Europe. And both these regions contribute to approximately 86% of the revenue of the Indian IT firms. This has made the Indian giants a little cautious about expanding their workforce.