Hiring freezes and layoffs at India's tech and startup companies are beginning to hurt related sectors as well, with TeamLease Services struggling to add headcount and expand margins, reports LiveMint, citing the staffing firm and analysts. "Yes. We are facing strong headwinds in IT and startups, which will impact our headcount addition and margin expansion," a company spokesperson told LiveMint.

Meanwhile, Kotak Institutional Equities said it expects TeamLease will record muted results in the second half of FY23 due to the weakness in the sector. “Our recent industry discussions suggest that staffing headcount in H223 will be impacted due to weakness in the IT/ITES (IT-enabled services) sector and hiring freeze or cost-cutting initiatives in new-age startups.”

TeamLease said it did not have clear visibility on the recovery of IT/ITES in the fourth quarter, and ‘given the lukewarm hiring in third quarter festive season, second half (H2) growth rate can be lower than the first half (H1 of the fiscal)’.