In a notable shift, three prominent players in India’s IT industry – TCS, Infosys, and Wipro – have experienced a substantial reduction in their combined workforce by nearly 64,000 employees in the financial year ending in March.
Dim Outlook Raises Concerns for Engineering Graduates
The outlook for the current fiscal year appears bleak, with Infosys projecting a modest revenue growth of 1% to 3% for the entire year. On the other hand, Wipro anticipates a potential revenue decline of 1.5% in the June quarter, with a slight chance of a 0.5% increase. These developments raise concerns for engineering graduates seeking opportunities in the sector.
Industry Leaders Attribute Reduction in Headcount to Various Factors
According to Peter Bendor-Samuel, CEO of IT consulting firm Everest Group, the decrease in headcount is a result of the industry’s corrective measures following the excessive hiring spree during the Covid pandemic and the ongoing contraction in demand. TCS CEO K Krithivasan notes that US enterprises are wary of a possible economic slowdown or recession, impacting their IT investment decisions despite the robust US economy.
Saurabh Govil, Wipro’s chief of HR, attributes the decline in headcount to both the demand environment and improved operational efficiency, which necessitate fewer personnel. Similarly, Infosys CFO Jayesh Sanghrajka points to shifting demand dynamics over the past year as a contributing factor.
Role of Gen AI and GCC Expansion Adds Complexity to the Situation
Phil Fersht, CEO of US-based IT advisory HfS Research, adds another dimension, highlighting the role of Gen AI in reshaping IT staffing demands. He mentions a major US enterprise reducing its IT workforce by leveraging large language models for application testing, potentially eliminating a significant portion of routine-based testing and coding roles in the coming years.
Despite these challenges, there is a glimmer of hope as global capability centers (GCCs) of multinational corporations continue to expand their presence in India, contributing to employment opportunities in the tech sector. The emergence of new GCCs in the country has been a significant driver of hiring in the industry, a trend that is expected to persist in the coming year.
