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Hiring In Indian IT Is Slowing Down.
Based on a report by domestic brokerage and research firm Anand Rathi, net headcount additions in Indian IT companies decelerated in the first quarter of the current fiscal year (Q1 FY23) after accelerating for seven quarters. Though, in Q2 FY23, Anand Rathi expects the net headcount addition to decrease further and normalize.
Industry headcount peaked in Q1. A few, including tech giants like TCS and Infosys, reported moderation in net headcount addition in Q1 compared to their 4 –year max.
"As we move toward the 40-50 k quarterly net addition mark, we expect cost pressures to start easing for companies. While it may not be visible so much in Q2 financials, the news flow around hiring is already reflecting slower headcount additions," it added.
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.
The attrition rates have also been high in IT companies. The attrition rate is quite low for TCS and Coforge and high for Infosys, Wipro, Cyient, and Mastek, as the note highlighted.
According to the brokerage, lower net addition means fewer supply pressures for smaller companies because they expect mid- to small-sized companies to experience fewer supply pressures and eventually improve margins as their joining rates and attrition rates increase.
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