TCS Reports Drop in Employee Count in Q2 FY24 as IT Firms Navigate Challenges

Tata Consultancy Services (TCS) has reported a decrease in its employee headcount by 6,333 during the second quarter (Q2) of FY24, resulting in a total headcount of 608,985. Furthermore, compared to the same period last year, there has been a reduction of 7,186 employees. In the first quarter (Q1), India’s largest IT company had only added approximately 523 employees. This trend is reflective of the challenges faced by IT firms due to macroeconomic factors and clients’ cautious technology spending.

Accenture, a global IT leader, also reported modest headcount growth of 951 employees in their fourth quarter while projecting a subdued 2-5% revenue growth for FY24. However, TCS saw an improvement in voluntary attrition, which dropped to 14.9% from 17.8% in the previous quarter, with expectations of further enhancements in this metric in the future.

In the first quarter (Q1), the six prominent Indian IT service companies experienced their most significant decline in headcount over the past three years, particularly during the April-June period. The combined workforce at TCS, Infosys, HCLTech, Wipro, LTIMindtree, and L&T Technology Services (LTTS) contracted by 18,000 employees, a more substantial decrease than the negative 9,000 in the June quarter of 2021, which occurred during the pandemic. Moreover, IT giants have been postponing or reducing campus recruitment drives, opting for a phased approach to hiring.

Data from TeamLease reveals that the Indian IT sector is planning to hire 40% fewer fresh graduates compared to the previous fiscal year (FY23) when they onboarded 250,000 engineers. Typically, major IT companies initiate their campus placement processes around August-September, but this year they have been notably absent from campuses during the placement season. TCS is an exception, having set a target of hiring 40,000 freshers for the current fiscal year.