Amid Layoffs, Engineers’ Hiring May Be Halved In FY24: Report

During FY22 and the first half of fiscal 2023, IT companies had reported record hiring and attrition numbers. But, the inflationary pressures, and the deepening war-led energy crisis in Europe spiralled the talent demand downwards.

New Delhi: The Indian IT companies are likely to reduce net hiring of engineers by nearly half year on year in the next fiscal amidst rising caution among companies, reported the Economic Times. TeamLease, one of India’s leading providers of human resource services in the organized segment, expects a 40 per cent dip on the FY24 employee addition vis-à-vis FY23 addition, based on the current outlook from companies.

“So far in FY23, there has been a net headcount addition of about 280,000 (across the IT sector) and Q4 addition is likely to remain flat,” Sunil C, CEO of TeamLease Digital told ET. “In recent quarters, attrition has gone down and growth visibility has also reduced. So, we would expect a 30 per cent-40 per cent drop on FY24 headcount addition based on the current outlook,” he added. He also said that this outlook could change six months down the line if companies change their growth forecasts.

During FY22 and the first half of fiscal 2023, IT companies had reported record hiring and attrition numbers. But, the inflationary pressures, and the deepening war-led energy crisis in Europe spiralled the talent demand downwards.

A cautious spending on technology sector is expected following the crisis in the banking sector which came into the public forum after the collapse of Silicon Valley Bank and the buyout of Credit Suisse by UBS.

Global IT giant Accenture had last week announced 19,000 job cuts to manage cost even as it lowered revenue guidance for FY24.

The Indian IT sector may see another quarter of negative net headcount growth among the IT service bellwethers (top eight firms) for the fourth quarter of the current fiscal ending on March 31, according to staffing firm Xpheno.

IT SECTOR HIRINGS INCREASED IN FEBRUARY

Naukri JobSpeak had published a report which said the hiring in Indian IT sector saw a 10 per cent sequential growth in February compared to the previous month signalling a positive comeback in the IT that witnessed a decline in the past few months in line with the global meltdown.

• As per the report, the demand for specialist roles such as analytics managers, big data engineers, cloud system administrators, and augmented reality QA Testers, increased by 29 per cent, 25 per cent, 21 per cent and 20 per cent, respectively.
• Also, the demand for DevOps and DevSec engineers increased by 19 per cent and 18 per cent, respectively.
• This outpaced the demand for data scientists and software developers, which has increased by 17 per cent and 11 per cent, respectively.

EXPANSION HIRING TO REMAIN DULL

“While attrition-triggered replacement hiring will be in play, expansion hiring will remain dull, if not absent,” said Kamal Karanth, cofounder of Xpheno told ET. “The top eight firms clocked a net headcount growth of 240,000 people over the last four quarters. So, going by the trend, we could be looking at a relative drop of 50 per cent in FY24 headcount,” he added.

Cognizant added 5,900 new employees to the table and in the fourth quarter, otherwise the previous quarter would’ve closed with a net negative, Kamal Karanth said in the report. TeamLease’s Sunil told ET that the first half of any fiscal year is when companies hire almost 70 per cent of their requirements. Less people are likely to risk leaving their jobs under current market conditions, he said.