In a concerning development for job seekers in the IT industry, major players such as Cognizant and Capgemini have reported a substantial decline in their collective hiring by over 150,000 employees globally in 2023 when compared to the previous year. Both companies, which have a significant portion of their workforce located in India, with a combined total of around 400,000 employees in the country, have seen a significant drop in new hires. In 2022, Cognizant hired 132,000 employees, while Capgemini recruited 140,789 individuals, excluding those brought on board through acquisitions.
However, the scenario changed drastically in 2023, with Cognizant hiring just over 60,000 individuals and Capgemini bringing in around 61,182 new employees. This decrease in hirings translates to a significant drop of 72,000 for Cognizant and 79,607 for Capgemini when compared to the previous year. Additionally, Indian IT giants like Tata Consultancy Services, Infosys, and Wipro have also witnessed a decrease in their overall headcount, which plummeted by approximately 70,000 employees in the fiscal year ending on March 31.
Amidst this slowdown in hiring and reductions in workforce, the IT companies are attributing these trends to macroeconomic uncertainties. Despite the companies being discreet about any layoffs, Cognizant took steps in 2023 to streamline its operational structure, optimize corporate functions, and adjust office spaces to suit the evolving hybrid work environment post-pandemic. These adjustments incurred costs amounting to $229 million, with $115 million allocated to employee separation expenses and $114 million towards facility exit and other related costs, as reported by the ET. The reduction in employee count was evident in Cognizant, with a decrease of 7,100 employees in the March quarter of the fiscal year 2024, bringing the total headcount to 344,400 globally, with a significant portion of the workforce based in India.
Furthermore, within the Capgemini Group, the total headcount as of March 31, 2024, stood at 337,200 employees, marking a 6% decline from the previous year. The offshore workforce constituted 57% of the total headcount, with about 192,000 employees, reflecting a decrease from the previous year. The Indian workforce formed approximately 66% of Capgemini's total headcount as of December 31, 2023. Additionally, the tech engineering sector is facing challenges as prominent tech companies like Microsoft, Google, Amazon, Tesla, Apple, and Meta are also reducing their headcounts due to various factors including AI integration, leading tech influencer Deedy Das to express concern about an impending "winter" for the technology industry, highlighting significant changes compared to the industry's state two decades ago.