Top two tech firms shed Gen Z flab, gain silver muscle

Bengaluru: Tata Consultancy Services Ltd and Infosys, India’s top two IT services exporters, have seen the share of Gen Z employees as a percentage of their total headcount plunge to the lowest in five years and a decade, respectively, showed an ET analysis.

The share of Gen Z employees – or those aged 30 and under – fell by about 5 percentage points last fiscal at Bengaluru-based Infosys, and by over 2.5 percentage points at Mumbai-based TCS. The trend underscores a tepid IT hiring climate amid industry turbulence, which have impacted onboarding of young talent the most.

At Infosys, the share of such employees declined to 54.7% in FY24 from 59.6% in FY23. The figure stood at about 59.6% in FY22, and 55.4% and 57.5% in FY21 and FY20, respectively. Between FY15 and FY19, the share of young staff ranged between 58% and 68.5% at Infosys. In fact, in FY15, it was the highest at 68.5%, documents uploaded on the company’s investor page showed.

IT bellwether TCS saw its share of young employees (aged below 30) in India drop from 59% in FY22 to 53% in FY23 and then 50.3% in FY24. In FY21 and FY20, it was at 56% and 52%, respectively.

On the other hand, the percentage of senior employees equal to or above 50 years at Infosys has been rising over the years touching 2.9% last fiscal. Like Infosys, TCS saw the percentage of employees above 50 years increase marginally in FY24.

Similarly, the share of mid-rung employees at Infosys rose by 4.5% to 42.4% in FY24.

Margins Hit
IT services companies use a three-layered pyramid model to represent hierarchy, with the bottom comprising the largest chunk of employees (mostly youngsters), the middle-level having fewer staffers (between 30-50 years of age) and the top made up of very few senior employees (aged 50 and above). An optimised or proper pyramid helps these companies in bringing down wage expenses. They also prefer to have a larger percentage of employees who are young and hired at lower cost than those above 40 and 50 years.

TCS and Infosys did not respond to ET’s queries.

Outsourcing expert Pareekh Jain, chief executive at EIIRTrend, said lack of fresher hiring and fewer campus visits have impacted the percentage of young employees at IT firms. “But this also shows that they have a huge opportunity to improve their pyramid when growth picks up, and thereby they can boost their margins,” he added.