Info-tech

IT majors go slow on hiring

TE Raja Simhan Chennai | Updated on January 27, 2018 Published on July 25, 2017

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Net employee addition of TCS, Infosys fell in June quarter; Wipro bucked the trend

Total employee strength at both Tata Consultancy Services and Infosys at the end of June quarter was lower than preceding quarter due to a decline in net employee addition.

In the last 10 years, this is the third instance when both companies saw net employee addition decline in June quarter.

In the past, for TCS the decline was in first and second quarters of 2009-10 and for Infosys it was in third quarter 2013-14 and in third quarter 2016-17.

TCS’ net employee addition in June quarter declined by 1,414 and Infosys’ by 1,811. However, Wipro bucked the trend with net addition of 951.

Lower attrition

Rajesh Gopinathan, CEO and Managing Director, TCS, told analysts that lower attrition was a reason for new addition declining. The company had fewer freshers coming in during June quarter compared to same period last year. This is more of a timing issue and a much larger number of freshers is scheduled to be taken on in second and subsequent quarters.

The decline in net additions may seem to be insignificant considering TCS has nearly 3.80 lakh employees and Infosys just over two lakh. However, considering that both have shown a decline June quarter could be of worry for the industry as in the recent past speculation is rife that software companies are retrenching a number of employees, said sources.

Increased automation and a shift to digital and cloud has adversely affected the net addition of employees in this quarter. There will be a massive plunge in net additions in companies as they will be moving towards focussing on improving delivery efficiency and revenue productivity with next generation jobs and building new skills, said Alka Dhingra, General Manager, TeamLease Services, a recruitment company.

Key reasons

DD Mishra, Research Director, Gartner, a research firm, said, demand for more market focussed pricing, automation, slowdown of traditional services, cut throat competition, business uncertainty and demand for new skills are some of the reasons impacting net additions in IT jobs.

“The dream run for the IT Industry in India is coming to an end and hiring process is expected to slow-down,” he said.

Ryan Blanchard of TBR said net additions at TCS declining as with Infosys was due to multiple factors. The company is developing its onshore resource base in an effort to address rising client demand for in-person collaboration, particularly given its effort to strengthen its consulting business.

The widespread use of intelligent and robotic process automation tools like Ignio, is also reducing the need for the same level of hiring to facilitate traditional outsourcing engagements, which has proven beneficial to help offset the higher costs of its shifting talent composition.

Wipro’s net hiring remained positive due to aggressive recruiting in the US as the company achieved its goal of staffing over 50 per cent of its workforce from local talent rather than foreign transplants, he said.

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Published on July 25, 2017
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