Job Growth Outpaces Layoffs, Yet IT Sector Faces Ongoing Challenges
BENGALURU: The Indian IT sector, traditionally a major employer of engineering and technology talent, is now navigating a cautious path in workforce expansion. With the rise of artificial intelligence (AI) and automation, companies are prioritizing productivity over aggressive hiring. The top three IT firms in India added a total of 1,438 employees in the March quarter, marking a recovery from a decline in the previous quarter. However, the overall hiring landscape remains uncertain, with firms emphasizing prudent workforce planning amid macroeconomic challenges.
Recent Hiring Trends
In the latest quarter, Tata Consultancy Services (TCS), Infosys, and Wipro collectively increased their headcount, reversing a previous decline. TCS led the way by adding 625 employees, while Wipro and Infosys contributed 614 and 199 new hires, respectively. This uptick comes after a significant reduction of 2,587 employees across the top five Indian IT firms in the December quarter, contrasting sharply with the addition of 15,033 employees in September. Despite this recent growth, the overall hiring forecast remains bleak, with companies adopting a cautious approach due to ongoing economic uncertainties.
For the fiscal year 2025, TCS, Infosys, and Wipro reported a net addition of 13,503 employees, a notable improvement compared to a decline of 64,000 in the previous year. TCSโs Executive Vice President and Chief Human Resources Officer, Milind Lakkad, stated that future hiring will depend on the business environment. He emphasized that campus hiring will continue at levels similar to the previous year, but net additions will be influenced by market conditions.
Cost-Cutting Measures
As the demand for IT services fluctuates, companies are increasingly focused on minimizing costs and maximizing the efficiency of their existing workforce. Ramkumar Ramamoorthy, a partner at tech advisory firm Catalincs, noted that traditional hiring metrics are becoming less relevant in the current landscape driven by AI and automation. Phil Fersht, CEO of HfS Research, echoed this sentiment, highlighting that major IT firms are now looking to leverage their current staff alongside AI technologies rather than relying solely on hiring new employees.
This shift in strategy reflects a broader trend within the industry, as firms adapt to the changing demands of the market. The emphasis on cost efficiency is particularly pronounced as companies seek to navigate the challenges posed by economic uncertainty and evolving client needs.
Job Market Challenges
Despite the slight uptick in hiring, the overall job market for graduates remains challenging. The tech sector in India hired approximately 126,000 individuals in fiscal year 2025, increasing the total talent pool to 5.8 million. This figure represents a modest rise compared to the 90,000 hires made during the same period the previous year. However, many large IT firms are still experiencing a decline in headcount, with much of the net addition attributed to Global Capability Centers (GCCs).
Experts warn that the current economic climate may continue to hinder job opportunities for new graduates. Fersht remarked that this environment is one of the most difficult for college graduates seeking employment, predicting that the slow hiring trend will persist throughout 2025. As companies navigate these challenges, the focus on strategic hiring and resource optimization will likely remain a priority in the coming months.
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