BENGALURU: For over two decades, information technology (IT) companies have consistently been among the largest employers of engineering and technology graduates. However, the landscape of hiring is changing as these firms navigate a period of economic uncertainty. With an increasing focus on automation and artificial intelligence (AI), IT companies are adopting a more cautious approach to workforce expansion, emphasizing productivity over sheer numbers.

During the March quarter, the top three Indian IT firmsTata Consultancy Services (TCS), Infosys, and Wiprocollectively added 1,438 employees. This marks a reversal from the previous quarter when their headcount had decreased by 936 positions. In detail, TCS added 625 employees, while Wipro and Infosys contributed 614 and 199 new hires, respectively. This cautious increase follows a troubling trend where the top five Indian IT firms collectively saw a reduction of 2,587 employees in the December quarter, a stark contrast to the significant addition of 15,033 employees in the September quarter.

As these companies brace for a challenging hiring outlook, the overarching macroeconomic conditions are reshaping the demand for IT services and subsequently affecting the job market. Companies are approaching hiring with a sense of prudence, recognizing that the current climate necessitates strategic workforce planning and cost-efficiency measures. For the fiscal year 2025 (FY25), TCS, Infosys, and Wipro reported a combined net headcount increase of 13,503, a stark recovery compared to an alarming decline of 64,000 in the previous year.

Milind Lakkad, Executive Vice President and Chief Human Resources Officer at TCS, emphasized the influence of the business environment on hiring decisions: "We will continue to hire from campuses, and it will be similar to last year's numbers. The net additions will depend on the overall business climate and our eventual hiring needs in the market," he stated, highlighting the uncertainty surrounding future hiring.

Wipro's Chief Human Resources Officer, Saurabh Govil, echoed a similar sentiment, noting that his company has adopted a careful approach to campus hiring. "We burnt our fingers three years back. So, we are very conscious that we do it the right way," he remarked, indicating a shift towards more cautious and deliberate hiring practices.

Industry experts are weighing in on these trends. Ramkumar Ramamoorthy, a partner at the tech growth advisory firm Catalincs, remarked that in this new era driven by AI, hiring metrics are becoming less relevant. Phil Fersht, CEO of US-based HfS Research, noted that major IT service firms are focusing increasingly on minimizing costs while maximizing the potential of their current workforce. "The hiring metrics are very pertinent in these changing times. IT service firms are exploring ways to integrate their existing staff with AI technologies, rather than relying solely on traditional hiring of fresh graduates to drive growth," he explained.

Despite these challenges, India's tech sector managed to hire approximately 126,000 employees in FY25, raising the total talent pool to 5.8 million. This figure is up from the previous year when the National Association of Software and Service Companies (Nasscom) reported 90,000 new hires, bringing the total to 5.6 million. However, its important to note that much of the net addition in the past year can be attributed to Global Capability Centers (GCCs) rather than traditional IT firms.

Commenting on the broader implications for job seekers, Fersht stated, "This is perhaps the worst environment we have known for college graduates looking for jobs. Given the current economic uncertainties, I expect the slow hiring trends to continue and remain flat throughout 2025." The shift in the hiring landscape is prompting discussions among fresh graduates and industry veterans alike, raising concerns about the future job market in technology fields.