Not just Cognizant: Other IT firms may hire 40% fewer engineers this year

Indian IT services firms are likely to hire nearly 40 per cent less engineering graduates this year as the industry looks at a challenging time

Technology services firms have been witnessing a decline in the traditional software maintenance business, which earns them a major chunk of revenue; as more businesses demand services through digital technology like cloud. This, analysts say, is freeing up more people from mundane works like testing.

Estimates state that the top five IT services companies - TCS, Infosys, Wipro, Cognizant, HCL Technologies - have hired nearly 60,000 engineers from campuses this fiscal, as against little more than 100,000 last year.

"This financial year campus hiring by IT services companies dropped by at least 40 per cent against the numbers of FY16," said Kris Lakshmikanth, chairman and managing director of The Head Hunters India, a specialized recruiting agency for IT sector.

Industry body Nasscom last month said it witnessed 5 per cent growth in overall job creation by information technology and information technology-enabled services industry this year.

Infosys, India's second largest IT services firm, said during its third quarter results that it hired nearly 5000 during the first 9 months, compared with 17,000 during the year-ago period.

Cognizant is likely to remove up to 10,000 in its next appraisal process.

It seems there is a huge demand supply gap especially in the IT services industry, said Rituparna Chakraborty, co-founder and executive vice president, TeamLease, a staffing agency. "While there more engineers graduating every years than the available number of jobs, campus hiring by Indian technology companies has only declined for the past three years."

Even if there were no Brexit or US Elections, hiring by IT firms would have been the same due to the major shift in technology and automation of lower-end jobs, added Chakraborty.
Some of the IT firms are also emphasising on re-skilling mid-level employees as they may face a bigger challenge due to this shift. Lakshmikanth believes the industry can also see a trend of freshers trained in emerging technologies replacing the 3-4 years experienced mid-level jobs at major software services firms as companies focus on cutting costs.