Recent analysis by Mint reveals a notable decrease in the proportion of young employees at TCS and Infosys. TCS’s share of workers under 30 years of age dropped from 59% in FY22 to 50.3% in FY24. Infosys saw a decline from 60% to 55% during the same period.
Reasons Behind the Decline
Experts suggest that this reduction is due to lower hiring of fresh graduates and slower growth in the IT services sector, rather than the rise of artificial intelligence (AI) or generative AI impacting entry-level jobs. Pankaj Kapoor, senior vice-president at Firstsource, explained that companies hired more aggressively when the sector was growing rapidly until 2022. With current growth expectations being lower, companies are hiring fewer freshers. Kapoor added that AI isn’t significantly affecting fresher hiring at this time.
Industry Data
Many IT services companies have a large portion of their workforce based in India. For example, Cognizant Technology Services Corp had 73% of its 347,700 employees working in India by the end of 2023. Infosys and Wipro also have a significant majority of their workforce based in India. TCS, with a similar setup, reported that 50.3% of its India-based workforce was under 30 as of FY24.
Hiring Trends and Future Outlook
Both TCS and Infosys have seen a drop in their young workforce. TCS’s younger employee count in India stood at around 226,933 out of 451,160, while Infosys had more than half of its 317,240 global employees aged 30 or less in FY24, compared to 60% in FY22.
Impact of Sector Growth
Analysts believe the decline in young workers is not a permanent shift but is tied to the current growth trends in the industry. Apurva Prasad from HDFC Securities mentioned that the decrease is largely due to reduced hiring of freshers after a peak post-pandemic. In March 2024, TCS and Infosys hired 40,000 and 12,000 freshers respectively, down from 78,000 and 55,000 in March 2022.
Sector Performance
The slower growth of the Indian IT sector has contributed to this trend. According to Nasscom, the sector grew by just 3.8% to $254 billion by the end of March 2024, marking the slowest growth rate in 25 years. TCS, Infosys, and HCL Technologies reported modest dollar revenue growth last year, while Wipro saw a decline.
This slowdown in sector growth has led to fewer fresh hires, particularly among younger employees, as companies await clearer signs of economic recovery and sector expansion.
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