Daybreak - More skills, same pay, barely any job guarantee — Infosys trainees are in for a rough ride

Episode Date: June 3, 2025

Of the 5,000 graduates offered jobs in 2022—the majority of whose joining was delayed by two years—755 have been laid off so far for failing to clear tests. The assessments this time were tougher than usual, said five trainees and ex-employees The Ken spoke to. The threshold for passing was raised from 50% to 65%. On top of this, new material was added, and the number of questions was increased.Then again, the times are changing. India’s IT-services industry has been a driver of economic growth for over two decades, contributing 7% to the country’s GDP and employing over 5 million people in FY24. But over the last three years, growth has stagnated—the ongoing tariff uncertainties being just the latest setback. But the real existential threat in this scenario is AI. The pressure is already on. Clients want quicker turnarounds on smaller budgets. Companies, in turn, have found the perfect patsy: pre-trained freshers, compelled to jump into projects from the get-go.Tune in. Check out our latest episode featuring Soumya Rajan, founder and CEO of Waterfield Advisors, India’s largest multi-family office and wealth advisory firm.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.Listen to the latest episode of Two by Two here

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording.

Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcasts or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. InfoSys are in for a rough ride. Just take the batch of 2022. That year, about 5,000 graduates were offered a job. A majority of them ended up joining the organization only two years later. And that's not even the worst part. At least 755 of those fresh, starry-eyed graduates have already been shown the door.

Why? The answer is quite simple. It's because they have failed to clear these tests that they take as trainees. This year, assessments for trainees before they become full-time employees was tougher than usual. Certain criteria were raised. That's my colleague, Debanjali. Biswas. She covers employment, workplaces and education for the ken. She spoke to a bunch of trainees who have desperately been trying to pass these tests and hold on to their jobs. At its core,

the material and the format has stayed similar, but there have been some major tweaks. Firstly, the passing threshold has increased. Earlier, if you scored a 50% grade, you would pass, but now it's been raised to 65. Secondly, there's been the addition of certain new material and the number of questions asked in these tests has also increased. One Java question has become three, four questions on database management systems has become eight.

So the time pressure on students to complete these tests, do it well, has also gone up. Now, the natural next question is why? Why is the bar getting higher? Why are these tests getting more challenging for trainees to pass? Short answer? Times are changing. India's IT services industry has been a driver of economic growth for over two decades.

It contributes 7% to the country's GDP and employs over 5 million people as of FY24. But over the last three years, growth has stagnated. The real existential threat in all of this, though, is artificial intelligence. It's set to upend 38 million jobs across sectors by 2030. And at the forefront of the disruption, our social disruption, our social intelligence. software and IT support roles. With AI and automation coming in, the biggest pressure on freshers is that they are expected to be more productive.

Since they do simpler tasks, it's expected that they will use automation to make these tasks happen quicker, happen more efficiently, and as a result, be more productive. Now, for freshers, typically in an IT setup, you have this concept of going free. from being in the training period to being billable, where you are actively on a project, where you are earning money for the company. Now, the time to become billable has shrunk by around 30 to 40% now, which means that earlier when a fresher joined an IT company,

they would take, say, six months to become billable, start working on a project. Now the expectation is that they will have to jump in at, say, the three or four month mark. Welcome to Daybreak. Business podcast from the Ken. I'm your host Rahal Philippos and I don't chase the news cycle. Instead, every day of the week, my colleagues, Dikda Sharma and I will come to you with one business story that is worth understanding and worth your time. Today is Tuesday, the 3rd of June.

They banjali spoke to two freshers who got job offers from InfoSys back in 2022. They finally got a chance to take the assessments after two years. Now, both of them are mechanical engineers with no coding knowledge. What happened in 2022 is that a lot of engineering grads were given offers, but the companies never onboarded them because there was less work for them. So a lot of these 22 graduates came on board in 2024 after two-year break. Now, one fresher I spoke to didn't have this opportunity to kick back his feet, you know, and relax. So he spent a lot of time working jobs wherever he could get one of them.

was a part-time job, another one was a contract role, and he was working for salaries as low as 9,000 to 18,000 a month in cities like Bangalore, where it's very difficult to sustain yourself. The other fresher I spoke to had a little more of a cushion. He also came from a mechanical engineering background, but he said that he took up some jobs initially, but then it didn't work out, and he was lucky to have friends who were placed in product companies. As a result, he spent the two years really focusing on upskilling himself. He used to actively speak to his friends in product companies, understand the trends of what companies want. He would upskill himself in those specific skill sets that were popular and hot at the time. And as a result, when both of these people entered

InfoSys, the experience was very different. The student who worked the low-paying jobs and didn't have time to upskill had a tough time catching up. He eventually didn't do well in the tests. And and was among the trainees that were ultimately laid off. The second student came in with prior knowledge on programming and computer science and therefore found the lessons a little easier. So even though he didn't succeed in a couple of these tests, he had an easier time passing them and he was more confident that when he gives his retest, he will actually pass instead of failing.

Typically, each new joinie has three attempts to clear each test. So you would get three attempts for Java, three attempts for database management systems, and so on. The first trainee I spoke to, he mentioned that on their onboarding when they came into the MISO training campus for InfoSysore. They were told by their instructors that there would be no negative marking in the third attempt to make it a simpler process for them. Now, this is something that the trainee mentioned to me. He was very confident about it when we officially reached out to InfoSys. InfoSys categorically told us that the negative marking policy had always been consistent and they would not mislead. So there's a bit of hearsay here, so take it with a grain of salt. But then the trainee mentioned that when they got to the third attempt, they were told

then by instructors that actually we have heard from the higher ups that negative marking will apply to this round as well. So we're really sorry for that. So as a result, this little bit of a fail save that they had in mind. And again, these are trainees who come from mechanical engineering backgrounds, civil engineering backgrounds, who don't really know much about computer science. They struggled because they were banking on the no negative marking to achieve this higher cutoff. Like I mentioned earlier, it isn't just InfoSys. In fact, Infusis is just the bellwether of what's happening in IT companies across the board. Trinies across IT companies are in for a tough time. You see, back in the day, being a fresher meant slow and steady growth with a fair bit of hand-holding.

But now things are different. The pressure is on and companies are expecting a lot more. Essentially when fresher's joined IT companies, right? The process was smoother for them. They would come in, they would spend six to eight months training, then they would shadow seniors, they would work at one code at a time, very low stakes, right? Even when they started working on codes, they would work on test codes, things that weren't final. But now you have, like, these routine jobs have become obsolete, where tasks can be done

in a couple of minutes instead of hours or days, right? So things like testing codes, validating research for certain codes, data analysis, these can be done in the blink of an eye. And as a result, these routine jobs that freshers did have become obsolete. Now, instead, they are, expected to do more complex things and as a result be on top of business requirements, client requirements. Say, for instance, instead of working on one low-stakes code, they are looking to test multiple app features for an app across multiple systems to understand whether this meets the client's requirements or not. Earlier, they would test, say, one particular feature for an app and then it would go through.

There would be a lot of time to trial run this with a lot of people checking. Now, it's a lot quicker. And you're doing larger scale things, integrating multiple systems, and doing it from the perspective of what a client would want. So you're almost expected to be more of an analyst instead of just a coder. Now, of course, the upside in all of this is the fact that freshers are getting to play a more significant role in projects. The way they're upscaling is the same.

way developers with 10 to 15 years are doing it through tools like chart GPT and someone of the opinion that these young freshers are able to adapt much quicker than their seniors. But not everyone agrees with that. A senior executive at InfoSys Tibanjali spoke to said younger employees lack a can-do attitude. And that's why, in his opinion, an unprecedented number of trainees failed the test this year. But what about the freshers that made it? Stay tuned. there, we are taking a quick break from the episode to make a very special announcement.

This week marks the 500th episode of Daybreak. And to celebrate, we invited a very special guest on the show to talk about something we just don't hear enough about. We sat down with Somia Rajin, the founder and CEO of Waterfield Advisors, India's largest multifamily office, to talk about what wealthy women do with their money, how they make it, how they grow it, and of course, how they spend it. Our target market or client base was women inheritors, women professionals and women entrepreneurs. Each one of them has a slightly different nuanced expectation from heritage. But the common thread for all three was that all these women were already financially independent, but they were not financially literate. But this isn't just a conversation about finance. It's about values, identity, and the quiet but powerful ways women are changing the story of money.

Today as a founder, I feel quite lonely in terms of who can I talk to when I have issues around scaling my business, taking on a co-founder, deciding when to raise capital. You know, the old boys' networks are many, but the networks for women are smaller. You can listen to the full episode right now on daybreak. it's out on all platforms. The link is in the show notes of this episode. Do check it out and let us know what you think. And if you've been with us across any part of these 500 episodes, thank you.

We could not have done it without you. Yes, thank you from Me Too. And now back to the episode. Despite all the work they're having to take on, the freshers that manage to stay in the game are not getting paid better, as you would assume. For context, average entry-level salaries and service, firms are about 3.5 to 6 lakhs per annum. Meanwhile, product, DFSI and consulting companies often offer one and a half to three times more. Right. So when you look at fresher salaries, they have been

stagnant for well over a decade now and they have not kept up with inflationary pressures in the way that they should. So firstly, salaries haven't changed. Secondly, to show optically that salaries have change because you still need to be competitive and you as a company need to attract freshers. What has happened is a lot of companies have salary grades now. So they will have multiple entry points for freshers and depending on your skill you can start at the very low level earning 2 to 3 LPA. You can go up higher also earning 6, 7, sometimes 8. Now naturally low salaries are a reflection of low margins.

Companies are running faster to stay in the same spot less they lose out to competition. If clients are paying less, naturally companies are trying to do the same work with fewer employees and more automation. That explains why IT services and consulting company cognizant now uses AI to write 20% of its code. And then there's the fact that the pricing of Gen AI tools is just not transparent.

What this means is while service companies charge astronomical prices to foreign clients for Gen AI capabilities, at the back end, it's low paid off in 21 to 25, role freshers that are doing the grant work. Now, cost of Chatterjee, the founder and CEO of AI Studio Kimchi, puts it rather succinctly. He says, companies are using AI engineers with two years of experience to build AI agents that sell for at least $100,000.

The catch is that these companies end up paying them just $10,000 US dollars a year. See, the thing is, IT companies today are undoubtedly swimming in uncharted waters. shorter stints have become the new normal. All this comes at a time when competition between IT companies has intensified. It has become a dog-eat-dog world now. Say a decade or so ago, even though it was an unsaid rule, people had, companies had their own territories of sorts. So a McKinsey would come in and do consulting for a project.

And then for that exact same project, E.I. would come in and manage the project, and then that project would be outsourced to TCS and InfoSys to do the tech part of it. Now what's happened is business has slowed down. As a result, everyone is bidding at the same time for all projects available. With tariff pressure coming from the US, companies are worried whether they'll be able to get budgets approved.

They're getting fewer deals to take on board. Another looming threat, global capability centres or GCCs. GCCs have seen a boom in India. A lot of GCCs for international companies are being set up right now. There's a lot of incentives from governments to do it. And the reason is very simple. All companies want to do proprietary work in-house right now. Digital transformation has to happen from within the company

instead of outsourcing to someone who only works with you on a project basis, who only knows you from a third-party perspective, right? think intellectual property, think AI innovation. All of this has to happen from within because it allows you to control that innovation in its entirety. It's no longer available with a third party operator to go and share your trade secrets with a competing client that they might have. And this move to make things happen in-house is showing in the tech hiring numbers as well. out of the 200,000 tech jobs that India offered in FY24, nearly 120,000 of those were hired for in GCCs.

Now, the only way to move forward for IT companies is through innovation. And companies are moving in that direction. For instance, in an effort to grow its product and platform business, Infusis recently introduced its AI offering topaz, designed to work with any AI model and cloud server. But as far as hiring is concerned, well, of the legions graduating from engineering colleges every year, most are just not job-ready.

So the rising assessment criteria to screen for better candidates may end up solving for this in the long run. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. Head to the ken.com and click on the red subscribe button on the top of the website.

Today's episode was hosted by Rahil Filippos and edited by Rajiv Sien.