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Cognizant and Capgemini see a significant decline in hiring in 2023

Layoffs in the tech sector will exceed 80,000 workers by 2024.

In 2023, two major IT companies, Cognizant and Capgemini, reported a significant drop in global hiring, with a combined total of 151,607 employees losing their jobs compared to the previous year. The decline was particularly noticeable in India, where the two companies collectively employ around 400,000 people. According to a report by the Economic Times, the numbers took a hit due to macro uncertainties, pandemic-induced over-hiring, and the belief that advancements in technologies like Generative Artificial Intelligence (Gen AI) may reduce the need for fresh hires.

The report shows that in 2022, Cognizant hired 132,000 employees, while Capgemini recruited 140,789, excluding acquisitions. However, in 2023, Cognizant’s hires dropped to just over 60,000, and Capgemini’s decreased to around 61,182. This represents a decline of 72,000 for Cognizant and 79,607 for Capgemini from the previous year. Other major Indian IT players such as Tata Consultancy Services, Infosys, and Wipro also saw their headcount shrink by approximately 70,000 by the end of the financial year on 31 March.

To streamline its operations and corporate functions, Cognizant launched a programme in Q2 2023, incurring employee separation costs of $115 million and $114 million in facility exit and other expenses throughout the year. By the end of March 2024, Cognizant’s headcount dropped by 7,100 to 344,400, with around 250,000 employees based in India. Similarly, Capgemini Group’s total headcount fell to 337,200, marking a six per cent decrease from the previous year.

The IT industry is still expected to dominate employment, but there will also be significant recruitment activity in non-IT sectors. Recruiters forecast that attrition rates will stay below 15 per cent from January to June 2024, which is a slight improvement from previous quarters.