IT giants Cognizant and Capgemini have experienced a significant decrease in hiring in 2023, according to The Economic Times. Their global workforce declined by 151,607 compared to the previous year. In 2022, Cognizant and Capgemini had robust recruitment numbers with 132,000 and 140,789 hires respectively. However, these figures plummeted to just over 60,000 for Cognizant and approximately 61,182 for Capgemini in 2023.
This downturn is in line with a broader trend across the IT sector, with other major Indian service providers like Tata Consultancy Services, Infosys, and Wipro also seeing workforce reductions of around 70,000 for the fiscal year ending March 31, 2023.
Peter Bendor-Samuel, CEO of Everest Group, attributes this trend to an overhiring phase during the COVID-19 pandemic in anticipation of sustained growth, which has not materialized, leading to a surplus of talent. He noted, “The companies are now significantly reducing new talent intake due to macro uncertainties and a contraction in the industry.”
The integration of AI technology is also influencing hiring practices, as there is a growing belief that General AI will reduce the need for entry-level positions. “This is contributing to firms’ hesitancy to hire,” added Bendor-Samuel.
Cognizant, in particular, has implemented significant cost-cutting measures, including streamlining its operational model and consolidating office spaces, which resulted in $229 million in associated costs by 2023. By the first quarter of FY24, Cognizant’s workforce had decreased by 7,100, totalling 344,400 employees. Capgemini’s staff count also fell to 337,200 by the end of March 2024, a 6% decrease from the previous year.
Pareekh Jain, CEO of EIIRTrend, views these reductions as indicators of broader industry challenges. He observes a slowdown in overall IT spending and a shift towards acquisitions rather than organic growth. Jain also highlights a significant gap in the labour market, with companies struggling to find the right talent and skills for emerging technologies.