Compared with the same period last year, job vacancies in the technology sector cohort — comprising tech services, products and tech-enabled startups — plummeted 67% in May amid sliding demand across all cohorts, showed data collated from top job boards and professional networking platform LinkedIn.
In absolute terms, the IT sector collective’s active talent demand fell to 76,000 in May, from 228,000 in the same month a year ago.
As companies globally are reducing discretionary spending, the IT services sector — the biggest contributor of jobs in the tech cohort — saw talent demand shrink 16% month-on-month, hitting its lowest volume in 29 months. Compared with last year, it was down by 58%, showed the job statistics put together by staffing firm Xpheno.
“The tech sector is experiencing an extended bad weather that has dropped active talent demand to record low levels,” said Anil Ethanur, cofounder, Xpheno. “A 67% year-on-year drop in tech sector’s active talent demand is unprecedented and has further diminished IT’s position as a key talent consuming sector.”
Lower discretionary expenditure could have an impact on jobs in other sectors as well. “Low demand volumes clubbed with a drop in velocity of hiring will have long-term impact on the tech talent ecosystem,” Ethanur said. “With discretionary enterprise spending under pressure, non-tech sectors will also be readjusting their trajectories soon.”
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Circumspect hiring this year follows robust job additions in the exports-heavy technology sector over the past couple of years.
“Every IT company that had invested in excess resources last year is now going slow on acquiring new talent given the weak global macroeconomic environment,” said Anandorup Ghose, partner, Deloitte India.
He added that conversations are now more around increasing productivity and reducing costs. “Companies are also looking at stricter performance appraisals this year,” said Ghose.
This comes at a time when Indian IT majors are adopting various cost tightening measures to address the issue of overcapacity.
Several companies are looking at rationalising their workforce expenses over the next few months through different means including putting more people in the lowest bands during performance appraisals, reducing bench period thresholds, and putting a freeze on variable pay for resources with low utilisation to encourage voluntary attrition of people on the bench, among various other methods, said top officials.
“Most organisations have tightened hiring approval ladders, including for non-billable roles. This is being used for mission-critical investments and to fund new hires required for immediate billable opportunities,” said Nitin Bhatt, partner & technology sector leader, EY.
Data also showed the IT sector’s contribution to overall active jobs dropped 5% to close at a record low of 35% in May. The previous record lowest contribution is the 40% recorded in April. The sector had earlier registered an 82% dominating contribution a year ago in January 2022.
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