The combined headcount of the 6 top Indian IT companies dropped 0.96% year-on-year in the second quarter of the current fiscal, even as fresher hiring picked up, resulting in a 1.12% sequential growth. The total headcount for the September quarter was 16,22,007 across TCS, Wipro, HCLTech, TEchM, Infosys and LTIMindtree, down 15,724 from the same quarter last year.
Sequentially, the headcount rose by 17,950, indicating some recovery, though experts say that hiring will be cautious and targeted towards focus segments for the rest of the year.
TCS, TechM and LTIMindtree added employees year-on-year, while Wipro and Infosys headcount went down. HCLTech was the only company to see both annual and sequential decline in headcount in Q2FY25.
“Given the evolving business models on the clients’ side, IT companies will also need to shift the focus to productivity, especially in light of AI/ML adoption. This will mean that productivity will no longer be solely measured on bench strength and ‘man hours’ but will also be derived via automation efficiencies,” Sunil Chemmankotil, country manager at staffing firm Adecco India, said.
The top 4 IT companies — TCS, Infosys, HCLTech and Wipro — reported an increase of 8,763 in combined headcount, with TCS accounting for the lion’s share.
“TCS, Wipro and Tech Mahindra adding to their headcounts may indicate that they are continuing to invest in areas of growth such as Cloud, AI and digital transformation, while other segments could be undergoing optimisation,” Krishna Vij vice president, TeamLease Digital, said.
Adding L&TMindtree and TechM to the mix, the headcount growth in absolute terms comes to 17,290, which translates to a 1.12% sequential increase in headcount, with TCS and TechM doing most of the heavy lifting. “It (the hiring trend in Q2) is a precursor to a more segmented growth in H2 where companies would specifically invest in growing headcount on select growth areas,” she added.
In Q1FY25, headcount growth turned positive sequentially for the first time since Q2FY23. In its analyst call, Infosys’ management said it is on track to hire between 15,000 and 20,000 freshers this year, and TechM leadership confirmed it is on track to onboard 6,000 freshers in FY25. In Q2, TechM onboarded 2,000 freshers, HCLTech onboarded 2,932 freshers and LTIMindtree brought 1,100 freshers on board.
Hiring by IT companies in the last two quarters is expected to be dominated by campus recruitment, staffing executives said. The combined fresher hiring outlook for FY25 by the top companies is around 90,000.
All the IT companies have called out a pivot to integrating AI in their products, services and processes, which staffing experts say will impact hiring strategies as well.
Another example of evolving business strategies can be seen in the rising utilisation rates of these companies which hover in the mid-80’s. while LTIMindtree has said it would like this number to stay around 85%, the other companies have not called out the utilisation rates specifically, or given an outlook.
Staffing experts say that average utilisation rates are likely to increase in H2, as they face the impact of significant changes, influenced by previous hiring increases, employee turnover and evolving corporate approaches. “IT companies experienced an average increase of 4-8% y-o-y in FY24. Since then, the utilisation rate has been growing steadily at 1-3% q-o-q,” Kapil Joshi, deputy chief executive officer, Quess IT Staffing, said.
This trend is expected to continue, head hunters said, adding that even if utilisation levels were to drop, they would not fall below 75%.