Indian IT sector shows 18% dip in hiring last year, analysts cautious in 2024

Indian information technology (IT) sector had shown an 18% decline in hiring activities in 2023 compared to the previous year, according to a new report published on Thursday. This decline can be attributed to challenges from saturated markets, skill gaps, and a slowdown in the global job market, it said 

The data from staffing firm foundit Insights Tracker (fit) revealed that while the sector experienced a significant decline in hiring, certain skills such as Java, DevOps, artificial intelligence/machine learning (AI/ML), and Python remained consistently in demand. The report also highlighted a shift towards skill-based recruitment within the industry. 

However, there is some positive news as the index showed a 3% increase in hiring activities for the IT sector in the last month of 2023, indicating a possible turnaround in the hiring scenario. Another study by staffing firm NLB Services suggested that the IT sector, which has witnessed a contraction in hiring due to the global economic slowdown, is likely to experience a positive turnaround with an 8-10% increase in hiring in 2024. 

The Indian IT sector faced a dip in the initial quarters of this year due to the global recession and a shift in business synergies. In fact, the report revealed that IT sector witnessed the sharpest contraction in headcount in the last three years during Q1 FY24, as companies felt the impact of the slowdown in projects. 

Prasadh MS, head of workforce research at staffing firm Xpheno, stated that the technology sector remains cautious and the forecasts for IT Services annual closures on talent are not encouraging for 2024. Major tech giants like Google, Amazon, Meta, and Apple have reportedly slowed down their recruitment processes, with active job postings by these companies decreasing by 90% compared to 2022. 

Prasadh also mentioned that with attrition under control and expansion hiring not underway, the hiring action will remain subdued for the quarter ending March 2024. However, there is hope for a pickup in hiring later in the quarter ending June 2024. In light of the current situation, both lateral and fresh talent in IT should be prepared for an extended hiatus.