Top 5 Indian IT Services Companies Witness Decline of 69,167 Employees in FY24

The top five Indian IT services giants, including Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, and Tech Mahindra, collectively experienced a decrease of approximately 69,167 employees during the fiscal year 2024, amidst a backdrop of uncertain demand in the industry.

Interestingly, HCLTech emerged as the outlier among these companies, being the only one to have added employees both in the fourth quarter ended March 31 and throughout the full year FY24.

This marks the first time in at least the last five fiscal years that the IT services sector has reported an overall decrease in employee addition for the entire fiscal year.

In FY24, TCS witnessed a reduction of 13,249 employees, Infosys saw a decline of 25,994 employees, and Wipro reported 24,516 fewer employees compared to the previous year. Similarly, Tech Mahindra, which disclosed its earnings on April 25, observed a decrease of 6,945 employees. Conversely, HCLTech recorded a net addition of approximately 1,537 employees in FY24, albeit a relatively small figure.

During the fourth quarter, TCS reported a decrease of 1,759 employees, while Infosys saw a drop of 5,423 employees. Wipro experienced a decline of 6,180 employees, and Tech Mahindra’s net addition was down by 795 employees. In contrast, HCLTech added 2,725 employees during the same period.

Analysts attribute this decline primarily to the lack of growth observed in FY24, prompting companies to prioritize margin improvement and utilization rate enhancement over extensive hiring.

Pareekh Jain, founder of EIIRTrend, commented, “Since growth was stagnant in FY24, companies focused more on enhancing margins, leading to reduced hiring. However, once growth resumes, we can expect an uptick in hiring. Additionally, with the advent of generative AI, companies may require fewer employees, leading to more just-in-time hiring based on demand.”

According to Gaurav Vasu, founder of market intelligence firm UnearthInsight, the decline in headcount aligns with expectations, and he anticipates industry headcount to remain stagnant over the next few years, particularly due to factors such as de-growth and increased emphasis on generative AI.

While Infosys and Wipro refrained from providing specific fresher hiring targets for FY25, TCS plans to recruit approximately 40,000 freshers, while HCLTech aims to hire over 10,000 freshers, and Tech Mahindra intends to hire 6,000 freshers.

Despite strong deal pipelines reported by all companies in Q4, there appears to be a divergence between deal wins and employee additions. TCS CEO and MD K Krithivasan attributed this to the time taken for trainees to become productive and billable after undergoing internal training programs.

Infosys CFO Jayesh Sanghrajka highlighted the company’s shift towards hiring less than half of freshers from campuses, opting for off-campus recruitment instead. Similarly, Wipro’s CHRO Saurabh Govil emphasized the importance of fulfilling existing offers before making new hires, highlighting the company’s commitment to honoring previous commitments.

Tech Mahindra and HCLTech reiterated their commitment to hiring, training, and deploying early career professionals and freshers in FY25, demonstrating a continued focus on managing resource costs and margins while investing in people practices and talent development initiatives.