Indian IT companies have been having a muted few quarters, and this is now beginning to show in their overall headcount numbers.
TCS, Infosys and Wipro have collectively trimmed their employee headcounts by 53,361 employees this year. The biggest fall was seen at Infosys, which saw a headcount reduction of 24,182 employees. It was followed by Wipro, which saw a headcount reduction of 18,510 employees and TCS, which ended up with 10,669 fewer employees.
Among the top 4 IT firms, HCL stood out as the only company which ended up with a greater headcount than last year, adding 2,486 employees to its workforce. But collectively, India’s top 4 IT companies saw their employee strength shrink by 50,875 employees last year.
This reduction in force comes after a muted few quarters for Indian IT companies, which have seen slowing growth and narrowing profit margins over the period. These are largely due to global macroeconomic headwinds which have caused businesses worldwide to tighten their purse-strings, which has meant lowered budgets that can be allocated for IT projects. IT companies have responded by lowering their hiring rates — some have said they wouldn’t visit college campuses for placements — and not replacing employees they lose through attrition.
There also also concerns around how AI would impact IT services. Programs like ChatGPT and Github Copilot are now able to write plenty of code for themselves, and if their capabilities improve over the next few years, larger companies could end up making their software in-house with small internal teams, as opposed to outsourcing it to Indian IT majors.
But it’s not only Indian IT companies that have been impacted with recent events. Blue-chip tech firms in the US have all laid off thousands of employees — Amazon had laid off 18,000 employees, Google had laid off 12,000 employees, and Meta had laid off 11,000 employees early last year. Smaller startups, both in India and abroad, had also collectively laid off tens of thousands of employees last year.
And these layoffs also seem to be continuing into 2024. Early this year, Google has let go of 1,000 employees, while Discord has fired 18 percent of its workforce. It remains to be seen if India’s IT companies will continue to jettison employees this year, but these will be worrying signs for India’s tech workforce — IT firms are their biggest employers, and if they slow down on their hirings plans, it could mean downward pressure on both jobs and salaries for the industry in the coming years.