Attrition rates and personnel additions were two more crucial measures that stood out, even if the demand and earnings projections were among the management commentary’s main points.
IT Companies Cutting Down Hiring
The top four Indian IT firms, TCS, Infosys, HCL Tech, and Wipro, on average hired around 60,000 people per quarter in FY22. This figure was anticipated to decline as recessionary worries grew in the US and Europe, the two major export markets for the Indian IT industry. And it’s now beginning to show in how many staff IT companies are hiring.
TCS, Infosys, Wipro, and HCL Tech hired 51% fewer workers in Q2 FY23 than they did on average over the previous five quarters, according to the sources. Since the start of FY22, these four IT companies have hired 59,220 people on average per quarter. That number was substantially reduced to just 28,836 in Q2 FY23.
TCS hired 58% fewer personnel than their respective averages, Infosys employed 34% fewer employees, while Wipro’s net additions were cut by 95%. The sole outlier was HCL Tech, which saw its net additions fall by 0.5%.
It’s not only a recruiting slowdown; IT firms such as Infosys, Wipro, HCL Tech, and Accenture are also postponing the onboarding of new employees. According to the article, some candidates have been waiting for their joining letters for almost a year. TCS stated during its Q2 earnings that it honored all employment offers in the first half of FY23, adding 35,000 new employees to its roster.
Attrition Rates are Still High
Despite a significant decrease in the rate of hiring, attrition rates remain high. It deteriorated for market leader TCS, remained steady for HCL Tech, and moderated for Infosys and Wipro. Infosys, the second largest Indian IT company, has been hit the worst, with attrition rates that remain much higher than rivals.
Softening demand and rising attrition rates appear to have contributed to IT businesses acquiring a phobia of moonlighting; previously, Wipro’s Rishad Premji was the only significant executive to publicly speak out against moonlighting; TCS and HCL Tech have now joined the chorus.
Milind Lakkad, the head of human resources at TCS, described it as an “ethical issue,” while HCL Tech claimed moonlighting is not permitted. On the other hand, Premji from Wipro referred to it as “clear and simple cheating.” To date, CP Gurnani, MD and CEO of Tech Mahindra, has been the sole significant exception.