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Total employee strength at Tata Consultancy Services increased at the end of September 2017 while for Cognizant Technology Solutions, Infosys and Wipro, it was lower than the preceding quarter due to a decline in employee addition.
However, cumulative net employee addition by the top four IT companies declined significantly in September 2017 quarter when compared with the same quarter in the previous year.
In the September 2016 quarter, the cumulative net addition by the top four IT companies was 24,688, with Cognizant leading the pack.
However, in the September 2017 quarter, only TCS reported a net employee addition of 3,402, while Cognizant, Infosys and Wipro IT Services’ numbers were lower than the preceding quarter due to reasons such as higher employee utilisation and automation.
“While we will, of course, carefully manage headcount, we will continue to hire and invest in critical skills needed to grow our digital business as well as work to bring voluntary attrition back to more normal levels,” said Karen McLoughlin, Chief Financial Officer, Cognizant, in a conference call with analysts.
Saurabh Govil, President and Chief Human Resources Officer, Wipro, commenting on the decline in employee numbers during the quarter, told analysts that it should be looked at from the combined issue of supply chain (hiring, attrition and utilisation) together. Wipro had always called out that it had headspace to improve utilisation. “We have actually gone ahead and looked at that in this quarter and we have seen the uptick in utilisation. So very clearly that is one driver which is there,” he said.
“Low-cost hubs remain critical to vendors global delivery models especially in areas such as application services that require scale. However, development and adoption of analytics-enhanced service delivery and project management platforms signal vendors’ delivery future lies in cognitive-enabled automation not labour arbitrage,” said Boz Hristov, Professional Services Senior Analyst, Technology Business Research, Inc, US.
As labour costs continue to rise in low-cost regions and digital solutions increasingly require onshore expertise and support, automation will become key for IT service vendors to sustain margins, he said.
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