A New Era of Opportunity After Layoff Blues

Indian tech companies and startups are reigniting their hiring efforts after a prolonged period of layoffs and hiring freezes that lasted nearly 18 months. As the fiscal year 2025 progresses, a gradual uptick in demand for talent is evident, with the IT sector showing signs of recovery according to recent data from specialist staffing firm Xpheno.

Gradual Recovery in Hiring Trends

After experiencing a peak of 168,000 active job openings in March 2024, the demand for IT talent dipped to a record low of 107,000 by May 2024. However, the current demand reflects a 25% increase from that low, signaling cautious optimism. Despite this improvement, the active openings still remain below 50% of typical peak demand, underscoring the ongoing challenges faced by the industry.

Experts attribute this hiring fluctuation to sustained global economic headwinds and reduced IT spending. Nevertheless, hiring across various levels is on the rise, particularly in campus placements, as companies look to optimize their workforce utilization, which has returned to pre-COVID levels.

Major Players Ramp Up Recruitment

Leading firms such as Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, and Tech Mahindra have collectively set ambitious targets to recruit between 81,000 and 88,000 freshers in the current fiscal year. This marks a significant shift from the record lows seen in FY24, with companies seeking to bolster their teams in response to renewed demand for IT services.

Despite economic uncertainties, the global appetite for IT services continues to fuel growth in the sector. The outsourcing of tech needs to India remains attractive due to cost advantages and a skilled workforce, paving the way for a positive hiring outlook.

Salary Trends and Retention Strategies

With hiring on the rise, experts predict an increase in salary expectations. Average salaries in the IT sector are anticipated to rise by 5-7%, particularly in niche technology areas where demand for skilled professionals is high. However, companies are advised to adopt cautious retention strategies to manage potential fluctuations in demand.

The financial implications of hiring freshers are substantial, as onboarding thousands can significantly impact compensation costs. Companies that have streamlined their headcounts in recent years are likely to approach fresh recruitment with caution, waiting for clearer visibility on revenues and margins.

Shifting Landscape in Tier 2 and 3 Cities

The current hiring demand is predominantly concentrated in Tier-I locations, with less activity observed in Tier 2 and 3 cities. However, there is a notable increase in remote and hybrid job openings, which could lead to enhanced talent opportunities in smaller urban centers. The technology industry body Nasscom notes that up to 15% of India’s tech talent is located in these emerging growth centers, driven by lower operational costs and improved infrastructure.

Startups Poised for Growth After Layoffs

After laying off over 30,000 employees since early 2022, Indian startups are now positioning themselves for growth. Industry leaders indicate that many startups have stabilized and are preparing to expand their teams to achieve aggressive growth targets. The demand for talent is particularly strong in tech hubs like Bengaluru and Pune, where new startups are emerging at an accelerated pace.

As the hiring landscape continues to evolve, the Indian tech sector is cautiously optimistic about its recovery, navigating through economic challenges while striving to attract and retain top talent.