Published on August 6th, 2022.

Top software exporters including global major Accenture and Indian IT services leader Tata Consultancy Services NSE 0.28 % have sharply reduced new recruitments in the first quarter of this financial year despite record levels of attrition, as they adopt a cautionary approach to ride out inflationary and geopolitical headwinds, analysts told ET.

Accenture hired just 12,000 people in the last quarter ending May compared to an average of 40,000 recruitments in the previous three quarters. TCS NSE 0.28 % took in 14,136 new recruits in the quarter April to June marking a stark contrast to its average quarterly hiring of 26,000 in the last fiscal. At HCL Technologies NSE 0.87 % the dip was more pronounced as the Noida company hired just 2,089 people in the first quarter of fiscal 2023, about a quarter of its intake of about 9,600 every quarter in the previous fiscal.

"We're entering a "realistic economy" where companies are expected to be profitable, have substantive value to their markets, and have a sensible fiscal plan to ride out the current inflationary pressures, especially in terms of keeping their core staff onboard," Phil Fersht, chief executive of HfS Research told ET.

"The rampant double-digit growth of the past 12-18 months is normalizing as demand starts to level off and the great resignation also cools off somewhat in the last 2-3 months," he said.

Terming this downtrend as normalisation of talent acquisition rather than a slowdown in hiring, analysts and company executives pointed out that demand for skilled talent is expected to remain strong.

Speaking to reporters at a post earnings call in Mumbai last week, TCS CEO Rajesh Gopinathan said the "company had gone lighter on hiring " even as it "remains on target to onboard 40,000 freshers" this fiscal year. During FY 21-22 TCS had hired a whopping 103,000 new employees.

The marked deceleration in hiring comes even as industry experts flag near-to-mid-term concerns over inflation and recession-- across the US and Europe-- the largest markets for IT service companies including TCS, Infosys NSE 0.17 % and Wipro NSE -0.94 %.

While TCS said its top clients are beginning early discussions around recession, HCL Technologies said that "demand ( has been) impacted in certain pockets."

However, both IT majors indicated a strong and "robust" demand environment with a "vigilant" stance on any change in the macro environment while announcing quarterly results.

Original News