India’s top three information technology (IT) companies have reported a reduction in headcount by 4,536 in the first quarter ending June 30, 2024, amid a continuing uncertain demand environment. While Tata Consultancy Services (TCS) increased its workforce, Infosys and HCLTech saw significant declines, reflecting a cautious approach to hiring.
Overall Decline in IT Workforce
IT companies have been decreasing their bench strength and deploying previously recruited employees. Human Resource heads unanimously said they would first put the existing workforce to use, and hiring will resume if and when demand picks up pace. This strategic move aims to maximize resource utilization and maintain cost efficiency during uncertain times.
TCS Stands Out with Workforce Expansion
Tata Consultancy Services (TCS) is the sole outlier among these IT firms, reporting an increase of 5,452 employees for the quarter. On July 11, Chief Human Resources Officer Milind Lakkad expressed satisfaction with the net headcount addition. “I am delighted to announce the successful completion of our annual increment process. Our continued focus on employee engagement and development led to industry-leading retention and strong business performance,” Lakkad stated. Despite previous setbacks, TCS’s proactive approach to employee management has yielded positive results.
Infosys and HCLTech Experience Significant Reductions
Infosys and HCLTech cumulatively saw their headcount drop by 9,988 in Q1. HCLTech experienced the steepest fall, reducing its workforce by 8,080, the most significant decline in the last five years. The company attributed this reduction to a divestiture. In April 2024, HCL Investments UK agreed to sell its entire 49 percent stake in a joint venture with US-based State Street International Holdings. Speaking at the Q1 earnings conference on July 11, Ramachandran Sundararajan, Chief People Officer at HCLTech, stated that headcount remains essentially unchanged, except for the reduction due to the divestiture.
Infosys reported a headcount decline of 1,908 employees. Jayesh Sanghrajka, CFO of Infosys, explained that the decline is attributable to several factors, including a recent shift in the company’s hiring model, focusing on recruiting fresh graduates both on and off campus. “Our utilisation rate is already at 85 percent, so we have little headroom left now. As we start seeing growth, we will look at hiring,” Sanghrajka added. Infosys plans to hire 15,000-20,000 freshers in FY25, depending on growth.
Strategic Adjustments and Future Outlook
This overall trend reflects a cautious approach by Indian IT firms amid economic uncertainties, balancing the need to retain key talent while managing increasing business costs. The reduction in headcount by Infosys and HCLTech and the strategic expansion by TCS highlight the diverse strategies adopted by these firms to navigate the current economic landscape.
