Clients are cutting back on IT spending as the global economy slows. India’s second biggest technology services firm by market capitalisation Infosys (INFY.NS) has twice cut its revenue growth forecast this year. Its U.S.-listed shares slid 6.5% on Thursday. Yet, what really spotlights the squeeze is the $73 billion company’s decision to skip hiring fresh graduates to add to its 329,000 workforce from engineering schools in the country this year.
That’s virtually unheard of in the firm’s recent history. The fates of outsourcers, including top rival Tata Consultancy Services (TCS.NS), and the more than 1.5 million fresh engineering grads India produces each year, are intertwined. IT firms provide well-paying jobs in urban India where less than half of workers have regular wages or salaries.
The sector is somewhat a victim of its own success. Clients splurged on tech upgrades during the pandemic. As a result, Infosys revenue grew 16% annually between financial year 2021 and 2023, twice the rate during the prior three years. That was always going to be tough to sustain. Policymakers will be closely watching to see if artificial intelligence will be a job killer. For now there is a skills gap: last year alone, more than 200,000 positions for data scientists and AI experts remained unfilled in India. IT companies need more of the right kind of workers. (By Pranav Kiran)
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