IT job openings drop nearly 67% amid continued downturn: Report

Indian information technology (IT) sector’s contribution to overall active jobs has hit the record lowest of 35% from the highs of 84% two years ago and 69% a year ago, according to a new report by staffing firm Xpheno. The report added that on year-on-year basis, the IT sector's job opening dropped nearly 67% from the same period last year amid continued demand downturn.

The sector, dominated by IT product and services companies as well as startups, had earlier registered an 84% contribution in January 2022 with 273,000 job openings. Over the last one and half years, the country’s IT sector has recorded a significant 67% drop in active talent demand, said Xpheno in its ‘Active Jobs Outlook Report for June 2023’ report. In May 2022, there were a record 228,000 job openings, said Xpheno. 

The May 2023 active jobs data shows a 22% month-on-month drop in hiring action from the IT Sector. Tech Sector’s collective demand volume dipped to a record low of 76,000 and its contribution to overall active Jobs dropped 5% to close at a record low of 35%, the report said. The IT Sector's active jobs volume stood at 97,000 in April 2023. 

The IT Sector’s active hiring action has been on a tailspin for nearly three quarters now. According to Xpheno, the current active talent demand from the IT Sector collective is the lowest seen over the last three years. Notably, the IT services sector talent demand shrunk by 16% month-on-month to hit the lowest volume in 29 months. The IT Services sector put out 58% lesser YoY openings as compared to the same period last year. 

Anil Ethanur, Co-founder, Xpheno told TechCircle that the technology sector is experiencing an extended bad weather that has dropped active talent demand to record low levels. A 67% YoY drop in the tech sector's active talent demand is unprecedented and has further diminished IT's position as a key talent consuming sector. 

“Low demand volumes clubbed with drop in velocity of hiring will have a long-term impact on the tech talent ecosystem. With discretionary enterprise spending under pressure, non-tech sectors will also be readjusting their trajectories soon. However the current low action levels are not sustainable, especially for the technology sector, and a recovery curve should be on the cards soon," said Ethanur.

This record drop in the technology sector's contribution has occurred due to the combined effect of lowering hiring action in IT and a simultaneous rise in non-tech sectors' talent demand. While IT job openings spiralled down, active demand from non-technology sectors grew in response to positive movements in demand.  

As per the Xpheno study, the top five non-technology sectors that dominated in terms of over job contribution include banking and financial services and insurance (BFSI), consulting and professional services, education, media and advertising, and health and wellness. Other sectors like retail, goods and logistics, business process outsourcing and automotive continue to contribute by adding more active openings. 

A Naukri JobSpeak Report published in May further showed that active hiring in non-tech sectors such as real estate and BFSI (banking, financial services and insurance) mitigated the dip in IT sector hiring in April.

Further, the hiring of freshers in the Indian IT sector has decreased by 30% compared to the previous two years due to the downturn, according to a study by Spectrum Talent Management. As compared to 2022, the new job openings for freshers, especially in the IT sector, have dipped by almost 20% this year.