Indian IT Giants Employee Decline: What’s Driving the Shift?

India’s IT sector has long been a dominant player in the global workforce, with companies like TCS, Infosys, and Wipro leading the charge. However, recent years have seen dramatic shifts in hiring trends. This blog takes a closer look at the journey of IT hiring in India, from its peak during the digital boom to the decline in workforce growth that started in 2023.

The Rise and Peak of IT Hiring (2020-2022)

2020: Steady Workforce Growth Amid Digital Acceleration

The year 2020 marked a turning point for the IT industry. As the world faced the onset of the COVID-19 pandemic, businesses across the globe rapidly embraced digital transformation. For Indian IT giants like TCS, Infosys, and Wipro, this translated into an uptick in demand for IT services, particularly in cloud computing, AI, and cybersecurity.

With the accelerated shift toward digital solutions, these companies continued to maintain a strong workforce, focusing on expanding teams to cater to the new demands. The workforce grew steadily as organizations invested in enhancing their IT capabilities to support the surge in remote work, e-commerce, and digital collaboration tools.

2021-2022: A Surge in Hiring Fueled by the Digital Boom

From 2021 through 2022, the IT hiring boom reached its peak. As businesses worldwide moved toward permanent remote work models and prioritized digital-first strategies, Indian IT firms saw massive growth.
TCS, Infosys, and Wipro aggressively expanded their teams to meet the increased global demand for IT solutions. These companies not only scaled their workforces but also adopted innovative talent acquisition strategies such as on-campus recruitment, upskilling programs, and lateral hiring to bridge the gap caused by the global talent shortage.

This period saw record-breaking employee numbers, with India solidifying its position as a global hub for IT talent. The industry was thriving, and the future looked promising for IT professionals in the country.

The Beginning of a Decline (2023)

Slowing Growth and Hiring Freezes

However, by 2023, the hiring momentum began to slow. While employee numbers had reached their peak, companies started to face challenges that affected their growth trajectory. The global economic uncertainties, combined with rising inflation and reduced IT spending by enterprises, led to a noticeable decline in hiring.

Rather than focusing on expansion, companies began shifting their priorities toward automation, efficiency, and cost-cutting measures. As businesses faced reduced budgets and lower demand for IT services, the hiring frenzy of previous years started to lose steam.

TCS, Infosys, and Wipro Witness First Signs of Decline

TCS, the largest IT employer in India, was among the first to show signs of stagnation in hiring. The company’s approach became more cautious, with employee numbers plateauing. Similarly, Infosys and Wipro experienced slower hiring rates or slight declines in their workforce.

This shift in hiring practices was further compounded by the growing focus on internal mobility. Companies were increasingly relying on upskilling and internal talent optimization to meet project demands, rather than ramping up fresh recruitment efforts.

2024: The Era of Downsizing?

Workforce Reductions and Restructuring

By 2024, the trends of downsizing and workforce restructuring became more pronounced. TCS, Infosys, and Wipro, once known for their massive employee counts, were now focused on reducing headcounts. 

The key factors contributing to this shift include:

Increased automation

The growing adoption of AI and automation tools has reduced the need for manual labor, leading to fewer job opportunities in certain sectors.

Lower client IT budgets

With global economic uncertainties, clients are cutting back on their IT spending, which has affected the demand for services.

Shift to project-based hiring 

Instead of hiring permanent employees, companies are now focusing on short-term contracts or gig workers to meet specific project demands.

Cost-cutting initiatives 

To remain profitable amid slowing growth, companies have introduced voluntary retirement schemes (VRS) and are restructuring their workforce to ensure maximum efficiency.

Conclusion

The Indian IT sector has witnessed a dramatic shift in hiring trends over the past few years. From an initial surge in hiring during the digital boom to a cautious approach and workforce reductions in recent years, the IT industry’s landscape is evolving rapidly.

For IT professionals, the key to staying relevant lies in continuous upskilling, staying ahead of tech trends, and adapting to new employment models. While the industry may be facing a slowdown, the demand for tech talent will continue to grow, albeit in new forms and with a different set of skills.

As the global economy navigates these changes, IT companies and professionals will need to stay agile to weather the storm and thrive in the new tech-driven era.