Tech firms, start-ups resume hiring after months of mass layoffs
What's the story
After a hiring freeze of 12-18 months, Indian technology companies and start-ups are back on the lookout for talent.
The period of inactivity was caused by mass layoffs amid tough business conditions.
According to data from Xpheno, a specialist staffing firm, the demand for IT professionals has been gradually rising over the last five months of FY2025.
Trend analysis
Hiring trends in the IT sector
In March 2024, the IT sector had a 20-month high with 168,000 active job openings. However, it dropped to 156,000 and then to a fiscal low of 107,000 in May.
The current demand is 25% higher than May's record low but still less than half of its usual peak demand.
"The sharp decline was a moderation in line with sustained global headwinds and sluggish IT expenditure with a drop in discretionary tech spends," Anil Ethanur, co-founder of Xpheno, told Moneycontrol.
Recruitment revival
Campus hiring and utilization rates
Hitesh Oberoi, CEO and MD of Info Edge, which runs job search portal Naukri.com, confirmed that hiring is now happening at all levels in IT companies.
He also expects campus recruitment to make a comeback.
"Now, with utilization rates back to the pre-COVID levels, they have started hiring again," Oberoi said.
He added that the current hiring activity is much better than what was seen in the past two to four quarters.
Goals
Top IT firms set hiring targets for freshers
After a year of record low hiring for both experienced professionals and freshers in FY24, IT companies have started advertising positions this fiscal.
Leading players like Tata Consultancy Services (TCS), HCLTech, Infosys, Wipro, and Tech Mahindra are looking to hire around 81,000-88,000 freshers in FY25.
This comes after a year-long pause in recruitment activities due to challenging business conditions.
Market resilience
IT hiring remains resilient amid economic slowdown
Sunil C, country manager for India at Adecco, told Moneycontrol that "IT hiring in India is showing resilience despite the economic slowdown in the US."
He added that global demand for IT services remains high and companies across the world continue to outsource their tech needs to India.
This trend is fueled by cost advantages and the availability of a skilled workforce.
Compensation trends
Salary expectations and retention strategies in IT sector
As hiring picks up, attrition rates may also increase, resulting in wage escalations.
Sunil C said "In India, salaries in the IT sector are projected to rise by approximately 5-7% on average."
He further added that salary hikes have always been healthy in lateral hiring and are likely to be better due to increased demand for niche skills.
Recruitment caution
Campus hiring to be cautious amid market uncertainty
Despite the positive trends, Xpheno warned that the increase in campus hiring will be cautious due to market uncertainties.
The firm explained that every 10,000 freshers hired translates into a direct compensation cost of ₹400-450 crore.
"Enterprises that have degrown headcounts to optimize costs and protect margins will go slow on such high spends till they have visibility of revenues and margin trajectories," Ethanur said.
Geographic focus
Hiring demand concentrated in Tier-I locations
Xpheno's data indicates that more than 85% of active hiring demand is concentrated in Tier-I locations. However, job openings in full-time hybrid and remote mode have doubled since January 2024.
This trend could possibly impact talent acquisition in Tier-2 and Tier-3 cities.
As per Nasscom, up to 15% of India's tech talent lives in these cities which are luring businesses with lower costs and better infrastructure.