Weak global cues and a cut in discretionary spending by clients are expected to sharply reduce campus intake by the Indian IT industry this year with market watchers saying that Infosys and HCL Tech's subdued take on hiring signals a tough road ahead for freshers in the near term.

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In the opening week of Q2 earnings season, IT biggies TCS, Infosys and HCL Technologies reported a sequential drop in employee tally - a staggering 15,800 on a cumulative basis. The Q2 scorecard of tech heavyweights fell short of expectations as global growth skid on elevated levels of inflation and interest rates, reduced investment, and geopolitical shocks, exacerbating worries.

Tech companies say that clients continue to defer newer, non-critical initiatives, choosing to focus on optimisation.

While global voices concede that there are no signs of bottoming out just yet, JP Morgan's Jamie Dimon has warned that the world is facing the 'most dangerous time in decades'. Meanwhile, Infosys's headcount fell by 7,530 to 3,28,764 as of September 30, 2023, against 3,36,294 in the June quarter.

Infosys, which hired over 50,000 freshers last year, has made it clear that it is not going to campus for recruitment for the time being. The Bengaluru-headquartered company slashed annual sales forecast to 1-2.5 per cent (from the previously stated 1-3.5 per cent) in a sign of continued curtailment in IT projects amid global macro economic uncertainties.

TCS reported a decline (of 6000 quarter-on-quarter) with its overall staff count at 6,08,985 at the end of September 2023, but has maintained a fresher hiring target of 40,000 for the current fiscal FY24.

TCS chief human resources officer Milind Lakkad said the company has not stopped hiring, but the overall new hires are trailing the number of people quitting the company due to which the overall count is down.

HCLTech's total employee base dropped by 2299 to 2,21,139 at the end of the September 2023 quarter compared to June quarter as the company reduced hiring amid an easing of attrition level.

"Due to significant fresher bench and reduced demand, major Indian IT firms are scaling down campus recruitment. The decision is prompted by a weak deal pipeline and recessionary concerns in the US market," Krishna Vij, Business Head – IT Staffing at TeamLease Digital said.

Large IT Services companies, having hired many freshers last year, are now focused on upskilling them in Gen AI, SAP and other emerging technologies rather than new campus recruitment, Vij added.

Sachin Alug, CEO of NLB Services believes a further decline of at least 10-15 per cent in the campus offers could be expected this year.

"As of the first week of October, there has been a decrease of more than 20 per cent in the number of students placed compared to the same period last year, despite a consistent number of companies participating in the hiring process," Alug said.

During the Q2 briefing, Infosys CFO Nilanjan Roy explained that the company has a significant fresher bench and headroom for increasing utilisation, and hence "is not going to campuses as yet".

"Last year, we hired 50,000 freshers and hired ahead of demand...We still have a significant fresher bench... We are, of course, training them on Gen AI...But we still have a way to go on utilisation, and at the moment are not going to campuses as yet...We will monitor this every quarter looking at our future projections," Roy added.

That said, the company will honour all the offers made, onboarding them as projects come up.

To a pointed question on whether or not the company will go to campuses this year for hiring, Roy said, "As we see it, I don't think it is likely that this year, we are going to be going...But we will watch it every quarter". HCLTech has reduced the revenue growth guidance for the full year in the range of 5-6 per cent from 6-8 per cent proj