In Worries for Techies, Hiring in Indian IT Slowing Down

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Net headcount addition in Indian IT companies decelerated in the first quarter of the current fiscal (Q1 FY23) after accelerating for 7 quarters with Q3 FY22 being the only exception.

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Though, in Q2 FY23, Anand Rathi expects the net headcount addition to decrease further and normalise.

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On the other hand utilisation has been falling since Q2FY22, impacting the employee productivity to some extent.

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“We estimate aggregate utilization levels to be at pre pandemic levels due to aggressive hiring over the last few quarters."

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"At the same time, growth has slowed from FY22, leading to lower overall headcount additions for FY23," the note on the Indian IT sector stated.

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Industry head-count peaked in Q1. With the small exceptions of Cyient and Firstsource Solution, all companies reported record headcount in Q1 FY22.

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Few including large ones like TCS and Infosys reported moderation in net head-count addition in Q1 compared to their 4 –year max.

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Hiring has dropped in tech companies, weighed down by rising margin pressure, focussing on retaining their permanent employees amid falling demand in the IT sector.

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