Vacancies in IT services sector at 17-month low in September

Xpheno said in a report that September was also the worst month among all sectors, with active job opportunities falling to 210,000 from 260,000 in August. Monthly average active jobs for this fiscal year through March have now dropped below the 280,000 mark in the sharpest decline since March 2020.

Anil Ethanur, co-founder of Xpheno, said the September performance is the result of a gradual decline due to rising inflation concerns in both local and key client markets. “The IT sector saw the hiring boom from last year. The current dynamics of hiring action are clear indicators of recovery in an already hot job market,” he said.

The IT services sector reported a 27% sequential decline in active job volume in September. “The IT services and software services sectors recorded a decline of 13% and 42%, respectively. A 35% drop was reported by Internet-enabled services and startups, which closed with 13,000 openings as against 20,000 in August 2022,” the report said.

To be sure, analysts said slow hiring by IT services firms was expected as sectors such as hospitality, which suffered the most during the pandemic, have returned in favor of employees.

Akshara Bassi, Research Analyst, Global Cloud and Server Market at Market Researcher Counterpoint India, said one of the major reasons for the slowdown could be the distribution of IT order books. “Most of the IT orders came during the pandemic years. With a slowdown in the order book and a drop in job loss levels, the IT sector has witnessed a slowdown in hiring, which is in line with global cues. Especially in the technology and IT sectors, employers have slowed down hiring as project demand has slowed compared to previous years.”

Bassi said attrition will hit the bottom rung this year. Mint reported on October 12 that IT attrition would remain high at 20% in the near term. “Both employers and employees will continue to be jobs enthusiasts, so both job layoffs and net job growth should stabilize,” Bassi said.

During Infosys’ quarterly earnings conference call on October 13, chief executive Salil Parekh said the fall in net hiring is not a major concern, thanks to a “strong large deals pipeline” and the September quarter “has historically been the only year for net job additions”. slower than”. , Incidentally, Infosys reported the lowest drop in net jobs among India’s top three tech services companies for the quarter ended September.

The quarterly earnings of IT services majors also reflected a decline in net additions of new employees. For example, Tata Consultancy Services (TCS), India’s largest IT services firm by revenue, reported a net workforce decline of 9,840 in the September quarter from a year ago. Infosys’ quarterly net job growth fell 14% from a year ago to 10,032 in the quarter. HCL also reported a 25 per cent drop in net jobs. Analysts said lower hiring in the September quarter is a reflection of slowdown in key sectors. Omkar Tanksale, Equity Research Analyst at Axis Securities, said a cautious client approach in borrowing heavy sectors such as banking, financial services and insurance, which is a major client base for Indian IT firms, could lead to a slimmer order book and short-term uptrend. . concerns.

Xpheno said the IT sector’s contribution to overall job openings dropped 58% – the lowest in 30 months – from more than 80% last year.