Active IT job vacancies in India plummet 60% in January

Job market experts said tech companies are cautious about adding to their payrolls amid worries around a gloomy global macroeconomic outlook, fears of recession in the West, and demand concerns due to the ongoing uncertainty.

The tech sector, collective of services, products and internet-enabled startups, put out 112,000 active jobs this month, a massive slump from 273,000 open jobs in January 2022 ago and lower than last month’s 124,000 active jobs, shows the data put together for ET by specialist staffing firm Xpheno.

This has also brought down the tech sector’s contribution to the overall active white-collar jobs in the country to a record low of 40%, down from its previous dominant position of 84% in January 2022.

“This is a major drop in action for the IT sector’s scale of talent demand,” said Anil Ethanur, cofounder of Xpheno. “The current quarter will be a critical wait-and-watch quarter,” he added.

Tech companies continue to grapple with a burgeoning bench size, project delays, slowdown in discretionary spending and high wage cost.

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“Low levels of fresher utilisation and a ballooning bench are key areas of concern for many companies,” said Nitin Bhatt, technology sector leader at consulting firm EY.

Also, longer decision cycles, project delays, reprioritisation of budgets, a slowdown in discretionary spending, and vendor consolidation are making demand forecasting and supply planning a challenge, he said. That apart, people costs remain high even as attrition has moderated to some extent. “All this is making companies adopt a cautious approach to hiring,” Bhatt said.

Tech companies had started slowing down hiring around April-May last year.

Experts said the local hiring pattern and the overall sentiment in the tech sector could be sensitive to the mass retrenchments at some of the big US-based tech majors over the last quarter.

Thousands of professionals at companies such as Google, Alphabet, Amazon, Meta, Twitter, and Microsoft have been handed over the layoff notice in recent times.

“The confidence level of recruitment demand goes down with news of mass layoffs abroad,” Ethanur of Xpheno said.

The IT services sector in India had its sharpest year-on-year drop of 50% in active jobs volume in January.

However, total active jobs count in the white collar jobs market – including technology and non-tech sectors – in January stood at 278,000, a marginal 2% increase from the previous month.

Anshuman Das, CEO of executive search firm Longhouse Consulting, said, “The slowdown in hiring activity in Indian tech companies is mostly cyclical than structural in nature due to fears of US recession, new project flow coming down, lowering of attrition, and wage inflation.”