Wipro plans to join rivals in cutting new hiring as tech spending cools

By Sankalp Phartiyal

Indian tech-services outsourcing firm Wipro Ltd. is planning to hire fewer engineering graduates this year, citing cautious clients that are cutting spending.

 

Instead of the usual big recruiting push, Wipro said it would first take on people to whom it had already made offers but hadn’t yet brought onboard. India’s fourth-largest software services firm made the comments as it reported decelerating sales in the fiscal second quarter and net income that missed analysts’ estimates.

“This year the environment has changed, as you’ve seen across the industry,” said Saurabh Govil, chief human resources officer, in an interview. “So, we will be cautious.”  Govil also said Wipro, which hired 22,000 new graduates in the year through March, will take on fewer new recruits overall this fiscal year. 

Wipro isn’t alone in deepening its reliance on the existing workforce. India’s information-technology bellwether Infosys Ltd., which hired more than 50,000 graduates in the last fiscal year, has said it’s unlikely to go to colleges for campus placement in the year through March 2024, while HCL Technologies Ltd. is hiring just about 10,000 new graduates, 5,000 fewer than it previously planned and about half of what it hired last year. The hiring trends will also likely impact smaller outsourcing firms.

All of these companies, including larger rival Tata Consultancy Services, are seeking to reduce costs and improve employee productivity. That’s not good news for the class of 2024, and will likely worsen a job crisis that could hurt Prime Minister Narendra Modi’s bid for a third term in office next summer.

India’s more than $245 billion IT services sector is one of the largest employers in the South Asian nation, typically known for hiring thousands of recent college graduates who get rigorous tech training and wait on the so-called “bench” before they start billable hours on client projects.

Indian IT services exporters hired aggressively during the peak of the Covid pandemic as companies around the world outsourced work to keep their businesses running smoothly. That boom has now cooled and clients battling high interest rates and inflation, as well as global economic uncertainty due to war in Ukraine and Israel, are cutting back technology spending, pushing IT firms to pause or slow hiring.