Companies in the Information Technology (IT) and IT-enabled services sectors have reduced the number of students they usually recruit from engineering college campuses, significantly this year.
College placement officers and principals say big companies are not rushing to recruit students. Tier 2 and 3 colleges that depend on IT and ITeS companies say this could affect placement in 2024.
“According to our college placement report, the IT sector is expected to reduce its hiring by 20% this year. This is likely to affect campus placements in 2024,” said T. Saravanan, principal of New Prince Shri Bhavani College of Engineering, a tier 2 college which admits students with cut-off marks from 189 to 150. “Some prominent IT companies have already slowed down their hiring and are delaying job offers to freshers by three to six months. This is putting pressure on campus placements. But we hope the situation will improve for the 2024 batch. Compared to the past three years, the hiring process for this year has been slower.” he said.
Chennai Institute of Technology principal A. Ramesh agreed that the overall placement trend was lower compared to last year, but tier 1 colleges have not faced any problems. Though IT and ITeS mass recruiters have not made any official statements, colleges say human resource heads have indicated that these companies have not planned as yet, for next year.
“Companies that recruit 40,000-50,000 candidates annually, have reduced this number to 9,000 candidates. Some IT companies have no plans to conduct recruitment drives at all, so we hear,” said a college principal requesting anonymity. A deemed university placement officer also said recruitment by the service sector had seen a downtrend as compared to last year. Unlike previous years, there are no bulk recruitments at private universities, said Aravinth, a parent.
Startups to the fore
Tier 1 colleges and deemed universities are relying on startups and product-based companies for recruitment. “In our college, 200 students from the 2024 batch have already been placed,” said Mr. Ramesh.
Industry watchers say bulk recruiters are cautious, but the situation is not alarming. “Core engineering companies, IT product companies, bank and service sectors have recruited candidates from tier 1 colleges,” said a former university placement officer, adding, “The joining time for fresh recruits may be delayed but once the market stabilises, which could be in the next quarter, the service companies may then opt for just-in-time hiring.”
“Indian IT companies are unable to predict requirement as companies in the United States have been reducing their excess staff, globally,” said K.E. Raghunathan, national president, Association of Indian Entrepreneurs. “Also, some candidates who were issued with offer letters two years ago have not been placed in regular jobs as yet. The impact could be more pronounced in Tamil Nadu which has a high number of engineering colleges,” he said.
The boom in start-up enterprises, many of which became unicorns over the past three-four years, also led to a sudden spurt in recruitment in the IT industry. “Most of the start-up unicorns have now been devalued by 30-60% and their funding has stopped. So, the growth trajectory is not as it was projected. All of this has added to the insecurity among the entrepreneurs in the IT sector,” he said.
‘Look beyond IT, ITeS’
Former chairman of Cognizant India, Ramkumar Ramamoorthy explained that though companies had projected “lower growth guidance,” campus hiring will not be significantly impacted.
“Engineering colleges should look at other areas with significant growth like semiconductors, medical devices, aviation and defence. Even within IT there is an interesting dynamic that is playing out: tech captives of large companies like Ford, GP Morgan, Astra Zeneca, and Caterpillar would hire significantly higher number of candidates this year. The colleges should also find ways to bring in companies under global capability centres, Mr. Ramkumar said.
