In 2023, the combined hiring of IT companies Cognizant and Capgemini globally decreased by 151,607 employees compared to 2022, according to their official reports.
Most of their workforce is in India. Together, they have around 400,000 employees there. In 2022, Cognizant, based in the US, hired 132,000, while Capgemini, headquartered in France, recruited 140,789 employees, not counting those from acquisitions. However, in 2023, Cognizant’s hiring dropped to just over 60,000, and Capgemini hired about 61,182. In simple terms, Cognizant hired 72,000 fewer employees, and Capgemini hired 79,607 fewer than the previous year.
Even the leading Indian IT companies like Tata Consultancy Services, Infosys, and Wipro observed a decrease in their workforce, totaling around 70,000 in the fiscal year ending March 31.
Peter Bendor-Samuel, CEO of consulting firm Everest Group, explained that these companies hired excessively during Covid to counteract high attrition rates and in anticipation of continued industry growth. However, with the industry now shrinking, there’s an oversupply of talent in these firms.
Due to uncertain economic conditions, natural attrition didn’t provide relief, leading these companies to reduce new hiring significantly. While Indian IT companies avoid discussing layoffs, Cognizant initiated a program in the second quarter of 2023 aimed at streamlining its operations, optimizing corporate functions, and adjusting office space to suit the post-pandemic hybrid work model. In 2023, Cognizant spent $115 million on employee separation costs and $114 million on facility exits and other expenses, totaling $229 million.
“Another factor which is also contributing to the firms’ hesitancy to hire is the belief that Gen AI will reduce the need to hire L1s (in level 1) or freshers,” Samuel added.
In the March quarter of FY24, Cognizant’s employee count decreased by 7,100 compared to the previous year, now standing at 344,400. Around 250,000 of its employees are based in India. Meanwhile, at the Capgemini Group, the total headcount fell to 337,200 as of March 31, 2024, marking a 6% decline from the previous year. The offshore workforce accounted for 57% of the total headcount, comprising 192,000 employees, down from 58% (207,300 employees) in March last year. As of December 31, 2023, Indians made up about 66% of Capgemini’s total headcount.
Pareekh Jain, CEO of EIIRTrend, pointed out two factors for the fall in hiring numbers. “There is an overall tech spend slowdown, and IT firms are relying on inorganic growth than on their organic growth. And that’s why you see there are more numbers of acquisitions at a time when hiring is at snail’s pace. They are reluctant to hire and train.”
Jain added: “The second factor is that in these times of AI and GenAI, companies are also finding it difficult to get the right talent and skills for such requirements. Market has no matching supply for these skills.”
