End of the silver linings playbook for our IT firms

Hiring down from 2.03 L in FY22 to 17. New labour code has shaved off over half a billion dollars in net profit for third quarter

- K Giriprakash

The old playbook of Indian IT services companies — hire more people, deliver more projects, grow revenue and profits — is now broken.

The Q3 results lay bare this stress, which is likely to persist for several winters. The new labour code has intensified this pressure, shaving off over half a billion dollars in Q3 net profit, while the clients’ demand for faster implementation of AI at much lower costs has led these firms to cut hirings at an alarming pace: the top five IT services companies added just 17 net hires for the first nine months of the current financial year, the lowest since their existence. Compare this to FY22, when these companies hired a total of 2.03 lakh employees.