Despite several quarters of economic slowdown, the information technology (IT) services sector continues to struggle with its hiring, and even prominent global capability centers are imposing restrictions on recruiting technology professionals.
This observation came from Hitesh Oberoi, the CEO of Info Edge, during an earnings call with analysts on November 7.
Information Technology Services Sector Struggling With Hiring
Info Edge, the parent company of the job portal Naukri, reported a nearly flat revenue growth for the September quarter, attributed to a year-on-year decline in billings from IT services clients.
However, in contrast, non-IT recruitment, particularly in fields like healthcare and infrastructure, experienced substantial double-digit percentage growth during the same period.
The recovery of IT hiring remains uncertain. There are no visible signs of improvement on the ground, and many companies are considering reducing excess IT staff before reinitiating recruitment efforts. Furthermore, some of these companies are forgoing traditional campus hiring for this recruitment cycle.
Even global capability centers (GCCs), including major ones, have been affected by the industry’s slowdown. Although Info Edge hasn’t yet categorized its IT hiring specifically, it’s estimated that 15-20 percent of its IT-related business is derived from GCCs.
In the recruitment business, revenues for the quarter grew by 9.1 percent year-on-year. While a significant portion of this revenue (55 percent) is derived from hiring for IT positions, approximately 45 percent is attributed to non-IT hiring.
Volume of IT Hiring Decreased; Salaries Offered in IT sector Increased
During the analyst call, Oberoi highlighted a paradox: while the volume of IT hiring on the Naukri platform decreased, salaries offered in the IT sector increased by approximately 15 percent, which in turn boosted the platform’s revenue.
Recent data indicated that India’s largest software exporters, such as TCS, Infosys, Wipro, and HCL Tech, collectively added 28,836 employees in the quarter ending September, representing a substantial 45 percent drop from the 52,842 they hired in the previous quarter. This reduced net addition signifies caution amid challenging conditions in key markets like North America, the United Kingdom, and Europe.
TCS reported its lowest net addition in eight quarters, adding 9,840 employees during the quarter, down from 14,136 in the previous quarter. Wipro’s net addition sharply declined, with just 605 employees added during the July-September quarter, compared to the previous quarter’s 15,446. Infosys also saw its net addition cut in half, dropping from 21,171 in the first quarter to 10,032 in the second quarter.
In this scenario, HCL Tech stood out as an outlier, with its net addition increasing fourfold, from 2,046 to 8,359 sequentially. Oberoi noted that not all IT companies reduced their hiring, and some smaller firms even increased their investments in the recruitment space compared to the previous year.
