IT sector grapples with persistent hiring slowdown

Hiring in the information technology (IT) services sector is not showing any signs of recovery even after several quarters of slowdown, and even big global capability centres are restricting their recruitment of techies, Info Edge’s Chief Executive Officer Hitesh Oberoi said in a post-earnings call with analysts on November 7.

Info Edge, the parent company of jobs portal Naukri, reported a flattish revenue growth in the September quarter as the company’s billings from IT services clients dropped year-on-year.

However, non-IT hiring — in sectors like healthcare and infrastructure — has grown in double digit percentage terms during the period, according to Oberoi.

“We don’t know when IT hiring will recover. We are not seeing any signs of that yet on the ground. A lot of companies would be getting rid of their extra IT headcount, before going out to hire again. Many of them are not even going to campuses this time for recruitment,” he told analysts.

“We also work with global capability centres and even the big ones among them have been impacted by the slowdown. Although we haven’t categorised our IT hiring properly yet, my guess is that 15-20 percent of our IT-related business is from GCCs,” he added.

The revenues for the quarter in the recruitment business grew 9.1 percent year on year. While 55 percent of the recruitment business is due to hiring for IT roles, about 45 percent is estimated to be from non-IT hiring.

During the analyst call, Oberoi also pointed out that while the volume of IT hiring on the Naukri platform had dropped, salaries offered by the sector had risen by around 15 percent, which in turn helped the platform collect more revenue.

Moneycontrol earlier reported that India’s largest software exporters TCS, Infosys, Wipro, and HCL Tech together added 28,836 employees in the quarter ended September, a significant drop of 45 percent compared to the 52,842 they added in the previous quarter.

A lower net addition number signifies caution as the environment has turned challenging in their major markets such as North America, the United Kingdom, and Europe.

TCS’s net addition during the quarter was 9,840 employees, down from 14,136 in Q1. For TCS, this was an eight-quarter low in terms of net addition. Wipro’s net addition saw a steep fall in the July-Sept quarter, adding just 605 employees as opposed to the previous quarter’s 15,446. Infosys on the other hand saw its net addition halve — from 21,171 in Q1 to 10,032 in Q2.

HCL Tech was the outlier in this case, with its net addition going from 2,046 to 8,359 — a 4x increase sequentially.

“It’s not that every IT company has reduced their hiring. There could be some smaller ones who have paid us more money this year than the last,” Oberoi remarked. Moneycontrol