This will be bad news for IT graduates, who were being hired in large numbers from their campuses in the past few years.
Recruitments by companies such as Tata Consultancy Services, Infosys, Wipro and HCL Technologies accounted for nearly a quarter of the organised private sector employment in the country in 2013-14.
However, hiring will be affected as IT services vendors struggle to crank up profitability at a time global weakness is forcing clients to optimise costs to hold on to margins, Crisil said.
'Despite a healthy revenue growth of 13 per cent for IT services foreseen in the medium term, aided by recovery in discretionary spending by clients, recruitments will shrink by around halve by fiscal 2018 (from the current levels) with vendors focusing on cost optimisation by maximising revenue-per-employee,' the Crisil report said.
The IT sector, with revenues of $118 billion, currently employs 3.1 million people.
Between 2001-02 and 2013-14, while revenues grew at a compounded annual growth rate of 18 per cent, the employee base grew 15 per cent.
According to Crisil, employment was generated in three phases during these years. The initial phase of high revenue growth during 2002-03 and 2006-07 saw a substantial rise in recruitment. This was followed by the global financial crisis between 2008 and 2010 and moderate recovery during 2010-11 and 2012-13.
The hiring rates till now had reflected the revenue growth. However, the sector is entering a phase where hiring and revenue will gradually be delinked, the rating agency said.
