InvestorQ : Is the IT sector laying off people aggressively now?
Aashna Tripathi made post

Is the IT sector laying off people aggressively now?

Aditi Sharma answered.
3 weeks ago

In the last 2 years, the IT sector saw an unprecedented surge in demand and revenues. That led to a period of rapid expansion in manpower to cater to the ever expanding needs of the clients. Things have changed for the worse in the last couple of quarters. IT companies are hitting the pause button on fresh recruitments. In fact, 5 out of the top 10 IT companies saw quarter on quarter fall in the number of sales and support staff. They are apparently letting go the non-revenue generating employees. This worker freeze is a lot more acute in the case of Wipro and Tech Mahindra; among the top IT companies in India.

In a sense, it is an outcome of the excess staffing and recruitment done between 2020 and 2022, as an after math of the pandemic, when demand had surged suddenly on an exponential basis. In 2 years, the top 10 IT companies added 5 lakh workers or expanded their workforce by a whopping 33%. It is this kind of expansion that is gradually unwinding as the market demand is failing to keep pace with this kind of aggressive recruitment. There are just not enough projects to boot. The hawkishness of the Fed has raised the bogey of recession and put the Indian IT industry in the back foot due to risk of lower tech spends.