India’s $254-billion IT sector is undergoing a transformation driven by automation and evolving technologies. Traditionally focused on workforce expansion, the industry is now automating low- to medium-complexity tasks, resulting in significant changes in hiring patterns. In FY24’s December quarter, the top five Indian IT firms saw a net reduction of 2,587 employees, a stark contrast to the September quarter, which saw an addition of 15,033 employees. While Infosys and HCLTech increased their workforce by 7,725 employees, companies like TCS, Wipro, and Tech Mahindra reported declines.
Indian IT Sector Faces Shift: Job Cuts and Slow Growth Ahead
This trend continued in the March quarter of FY24, with the firms collectively cutting 12,600 jobs, reflecting a shift from the previous fiscal year when the sector added 60,000 employees. Experts predict that in FY25, the IT sector will add less than a quarter of last fiscal year’s workforce, with growth largely driven by global capability centers (GCCs). GCCs are expected to outperform traditional IT firms in workforce additions for the second consecutive year.
Peter Bendor-Samuel from the Everest Group explained that during the pandemic, the industry hired aggressively, resulting in an overstock of talent. As companies reduce hiring and allow attrition to rebalance, productivity gains have helped offset some of the impact. HCLTech’s CEO noted that revenue growth no longer depends solely on increasing headcount, with rising demand for skilled professionals driving higher billing rates.
Uncertainty for Indian IT Professionals in the U.S. Amid Policy Changes
Meanwhile, Indian IT professionals in the U.S. face uncertainty as immigration policies, including H1B visa and Green Card rules, could change under the new U.S. administration. Some professionals are exploring opportunities in countries like Europe. Despite uncertainty, experts point out that U.S. companies will struggle to quickly replace skilled professionals, adding complexity to the global IT landscape.
