The lack of jobs in India’s highly valued IT sector may have taken away some of the glamour of this golden age.
White-collar employment sites are characterizing the downward hiring trend in the IT sector as “unprecedented” and “a near freeze,” despite the industry having made a reasonably successful recovery after the COVID-19 epidemic. The software sector has an overabundance of talent from consecutive batches of engineering graduates, and Infosys and Tata Consultancy Services (TCS) have shunned campus hiring for the second year in a row.
A reduction in attrition rates—the IT and Information Technology Enabled Services (ITES) sectors saw a decline in attrition from 27% in 2022 to 16–19% in 2023—makes the situation more dramatic from the standpoint of a job. This suggests that there are no new employment being created, fewer people leaving their occupations, and no rush to fill open positions. The employment ban is having an adverse effect everywhere.
A 40–50% decline in hiring was predicted for the current fiscal year in August of last year by specialized staffing company Xpheno and other employment portal websites. The updated version is now “low-to-no hiring action in India for entry-level positions and freshers.” Additionally, it might have a negative impact on job opportunities for allied industries like start-ups and other tech-related organizations. Over the past two years, data from job portals indicates that recruiting for software companies has decreased by 78%, while hiring for start-ups has decreased by 73%.
After peaking at 40% in the first quarter of 2022, gross IT hiring addition fell to an all-time low of 14% in 2023. According to data compiled by the Naukri JobSpeak Index for December 2023, white-collar hiring in India saw a 16% decrease in December of last year compared to the same month the previous year. The data was significantly impacted by IT. In addition to a 21% decline in hiring from December 2022, the industry had a 4% decline in hiring from November of the previous year.
After peaking at 40% in the first quarter of 2022, gross IT hiring addition fell to an all-time low of 14% in 2023. According to data compiled by the Naukri JobSpeak Index for December 2023, white-collar hiring in India saw a 16% decrease in December of last year compared to the same month the previous year. The data was significantly impacted by IT. In addition to a 21% decline in hiring from December 2022, the industry had a 4% decline in hiring from November of the previous year.
Put otherwise, the amount of employment in the IT sector has decreased dramatically over the past year, and this trend is continuing. The IT industry is highly cyclical and strongly correlated with the ups and downs of world economic patterns. This implies that when things go wrong on a worldwide scale, the IT industry is affected right away. When the economy does rebound, the IT industry often reflects that recovery more in line with the midcycle. The severity of the decline in business prospects is something that many analysts and maybe even the IT businesses did not anticipate.
The Indian IT industry is predicted by trade association Nasscom to generate $253.9 billion in sales in FY’24, a 3.8% growth rate. Less than half of the 8.4% increase rate from the previous fiscal year is represented by that. The trade association projects an increase in employment of around 60,000, which is almost 80% fewer than the 2,90,000 jobs added the year before.
Businesses like Infosys and TCS could be positioned to benefit from the AI revolution that other businesses will need to go through. According to HSBC, during the next ten years, India would require 70 million employment. When considering an incredibly vulnerable employment picture, the fact that thousands of job positions are currently being taken out of a pretty restricted organized job market pool is concerning.
However, neither the number of jobs that IT has historically produced nor the level of skilling or reskilling that IT professionals will need to possess are well defined. If the stats are any indication, they are warning us to be cautious and to scale down; big Indian IT services businesses’ campus recruiting is at a three-year low, and the employment of replacement staff has also significantly slowed down. It appears that making sure fewer people accomplish more is the main goal.
