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IT Industry’s Remarkable Growth: Over 8,000 Inorganic Hires in 3 Months


According to Jefferies, Indian IT services firms experienced a notable decline of 22,000 in their net aggregate headcount during the first quarter of FY24. This drop contrasts with a less significant decline of 9,000 in their net aggregate headcount in the March quarter of FY23. Interestingly, despite muted statements from Indian IT companies about their hiring plans for the fiscal year, they have been augmenting their workforce inorganically.

Publicly available data indicates that these IT companies have incorporated at least 5,550 employees into their workforce through inorganic means. Analysts believe that this number could potentially exceed 8,000 when considering undisclosed deals not in the public domain. The increase in headcount is primarily attributed to rebadging deals and acquisitions.

Rebadging involves the transfer of employees from clients to IT vendors and often forms part of the agreements secured by IT companies. This strategy allows them to access a ready-made pool of skilled talent, enhancing their capabilities in various regions, industries, and services.

For instance, Infosys recently announced its acquisition of 1,400 employees from Danske Bank’s IT center in India and an additional 400 employees from its deal with Liberty Global. HCLTech, on the other hand,

revealed the induction of 400 employees from its Cloud Software Group deal and completed the acquisition of German automotive engineering services provider ASAP Group, adding 1,600 employees to its workforce.

IT Industry's Remarkable Growth: Over 8,000 Inorganic Hires in 3 Months

UST strengthened its telecommunication practice by acquiring a Dallas-based telecom engineering firm, MobileComm, and integrating over 1,300 employees. Xoriant acquired Thoucentric, a specialized consulting firm based in Bengaluru, along with its 450 employees. Several mid-sized companies, including Happiest Minds, Mphasis, Sonata, and LTTS, have also made acquisitions this year.

Happiest Minds initially stated its intention to hire 1,300 employees in FY24, but they emphasized that acquisitions also contribute to their total headcount. For instance, they added 500 employees through the acquisition of Madurai-based SMI last March.

In summary, Indian IT companies are strategically bolstering their workforce through inorganic means, leveraging rebadging deals and acquisitions to access skilled talent and enhance their capabilities in various domains.

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