Friday, February 7, 2025

IT Companies are aggressively cutting jobs across levels

IT companies are looking to trim their workforce by 5-8% in the coming quarters, mostly at the middle and senior levels.

According to recruitment experts, that’s because their margins are shrinking due to pricing discounts, increased US hiring (3x as expensive as desi talent) and the emergence of new technology areas.

“The senior project manager or delivery manager kind of roles, with an annual salary of Rs. 20-40 lakh, faces the maximum risk, It could further take a toll on the high unemployment rate in the country over the next few quarters”

Cognizant has already announced layoffs, while TCS and Infosys are hiring more freshers and rejigging mid- and senior-level roles. Cognizant plans to streamline its total employee pool by over 12,000 employees while reports claim that Infosys will let go of at least 10,000 employees.

Between 2014 and 2017, IT industry saw mass layoffs. In 2014-15, TCS laid off close to 3,000 employees. A 2017 Mint report said seven top IT firms such as Infosys, Wipro and HCL Tech looked to lay off close to 56,000 employees.

Although the homegrown IT major say there is no mass layoffs that has been planned, the idea is to correct the current “barrel shape” structure of the offshore pyramid. 

Cognizant CEO Brian Humphries explained that the company is trying to correct the “employee pyramid” which has been distorted in the past. The company said it would increase its graduate hiring by 30 percent and cut down of mid-to-senior level staff. Cognizant is aiming to reduce its operation cost by $350-$400 million.

“There is an onsite pyramid where most of the costs fly is a top-heavy pyramid. The bottom end of the offshore pyramid is more like a barrel shape and that is something which we intend to correct. One is we are increasing the fresher intake offshore that will broaden the base of the pyramid,” said Nilanjan Roy, CFO, Infosys. 

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