40% New Jobs Cut in IT in FY24 – TCS, Infosys and HCL

Introduction

The Indian IT industry, which experienced a flourishing period during the pandemic, has been facing a challenging phase in recent quarters. The industry is expected to witness significant new job cuts, around 40% in annual hiring. This decline is attributed to uncertainties in demand and a slowdown in technology-related services.

Key Takeaways

According to staffing firm Xpheno data, leading IT firms in India are expected to hire only around 50,000 to 100,000 new employees in the fiscal year 2024. It is a significant drop from the 250,000 individuals hired in FY2023, marking new job cuts of 40%.

Moreover, during the first quarter of FY24, India’s top five IT companies collectively reported a decline of 21,838 in net headcount. Global IT giants like Accenture and Capgemini, known for their substantial workforce in India, witnessed new job cuts of over 5,000 employees.

The Impact on the Indian IT Industry

The Indian IT industry is valued at an impressive $245 billion, with the United States and Europe being its primary markets. Any economic downturn in these regions would inevitably hurt India’s service exports. Consequently, this would lead to disruptions in the demand cycle, decreased non-essential spending and projects, reduced client orders, and similar effects.

Coping Strategies by IT Companies

As the pace of hiring slows considerably, IT companies focus on enhancing employee utilization metrics. These metrics measure the proportion of employees actively engaged in projects. Companies aim to maximize employee utilization during these challenging times by optimizing employee utilization.

The Hope for the Future

Despite the current challenges, there is hope that the IT sector will experience a turnaround once global economic conditions improve. As uncertainties subside and demand for technology services rebounds, IT companies may witness a revival in their hiring activities.

Conclusion

The Indian IT industry, which enjoyed a golden run during the pandemic, is currently navigating through a complex period due to a projected decline of 40% in hiring for FY24. The uncertainties in demand and the slowdown in technology-related services have contributed to this situation. However, with strategic measures in place and the anticipation of a global economic recovery, the industry holds the potential to bounce back stronger.

FAQs

Centre Aims to Boost Economic Growth with Rs 6 Trillion Capital Expenditure Target for FY24

Introduction

In response to the challenges posed by rising private company capex spending without clearly indicating a broad-based capex cycle, the Indian government has shifted its focus towards public capital expenditure (capex) as a potential solution to “crowd in” private investments.

The recent move in the Union Budget of February 2023 to increase the capital expenditure by 33 percent for FY24 to Rs 10 lakh crore, compared to Rs 7.5 lakh crore in the previous year, is a significant step towards achieving this goal.

The primary objective of this increased investment in infrastructure development, including roads and railways, is to stimulate demand and consumption within the country, ultimately boosting economic growth. In the April-June quarter, the Centre’s capex reached Rs 2.78 trillion, accounting for 27.8% of the FY24 target, compared with 23.4% of the corresponding target in the previous year.

Strategic Focus on Capital Expenditure

The Indian government has set an ambitious target to undertake a budgetary capex of Rs 6 lakh crores, which constitutes 60% of the Budget Estimate for FY24, during the first half of the current financial year. This strategic move aims to minimize the adverse effects of the global demand slump on the economy and foster sustainable growth.

Key Takeaways

The decision to increase capital outlay is a positive move with long-term benefits for the Indian economy. By prioritizing infrastructural development, the government aims to drive economic growth and generate employment opportunities. This emphasis on job creation will create a ripple effect throughout the economy, increasing consumer spending and further boosting economic activity.

The expansion of public spending is a well-thought-out strategy that revitalizes the economy and encourages private companies to participate actively in the country’s growth trajectory. As the government invests in critical infrastructure, private firms may find more opportunities to collaborate and leverage the improved infrastructure for business growth.

Conclusion

The Indian government’s decision to target a capital expenditure of Rs 6 trillion for FY24 reflects a strategic approach to boost economic growth. The government aims to stimulate demand, create employment opportunities, and drive economic expansion by focusing on public capital expenditure, especially in infrastructure development.

This move lays the groundwork for sustainable growth and encourages private companies to contribute actively to India’s economic progress. The increasing collaboration between the public and private sectors is poised to pave the way for a stronger and more resilient Indian economy in the years to come.

FAQs

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